March constructsteel newsletter

The Italian government has scrapped a generous tax credit scheme aimed at making homes more energy-efficient amid warnings of dire effects on the construction sector. The popular Superbonus 110 initiative, which entitled homeowners to a tax credit of up to 110% on the cost of upgrading their property, led to a surge in home renovations and helped to fuel Italy’s economy after the effects of the coronavirus pandemic. But it has also cost the government more than €110bn, pushed up the cost of building services and been blighted by widespread fraud.

UK starts onsite (covering 3 months to end of Jan) fell by 47% compared with the previous three-month period and stood a third lower than in the same period a year earlier. The drop in work commencing was particularly large for projects worth £100m or more, which fell by almost two-thirds. Meanwhile, starts on projects worth less than £100m fell by 20% on a seasonally adjusted basis.

The volume of new loans for construction by German banks fell 43% year-on-year to 14.6 billion U.S. dollars in December 2022. Between January and November 2022, however, the number of new homes approved for construction fell by almost 6% to around 275,000. The number of building permits for single-family homes and duplexes fell even more sharply, by more than 10%.

After recording their biggest drop in over two years, overall construction and nonresidential input prices whipsawed upwards again in January, increasing 1.3% and 1.1% respectively. Both categories are 4.9% higher than a year ago. The jump in overall construction input prices reflected the smallest annual increase since January 2021, but stymied progress made in December, when prices plunged 2.7%, the largest drop since April 2020.

Construction costs in Argentina have nearly doubled during the last 12 months, in line with high general inflation, pressuring the government’s public works plans in an election year. In Greater Buenos Aires, construction costs increased 6.2% in January month-on-month and 97.9% year-on-year.

Brazil’s land transport regulator ANTT authorised TAV Brasil to build and operate the 380km, US$9.7bn high-speed train between São Paulo and Rio de Janeiro for 99 years. The final  budget of the entire project would be calculated after the engineering work and evaluation are concluded.

The value of works in the construction industry in Mexico registered a 13.3% increase in December 2022 (year-on-year growth, real terms). In all of 2022, the value of the construction industry grew 5.1% compared to 2021.

Indonesian government starts building $2.6bn hydropower plant. Construction of the hydropower facility is expected to be completed over a period of seven years. Indonesia is a major producer of thermal coal, which serves as the country’s main source for generating power. The country plans to shift to cleaner energy generation sources and has set a target to reach net-zero emissions before 2060.

India has approved plans to build the country’s biggest hydropower project in the state of Arunachal Pradesh. The $3.9bn scheme will be built on the Dibang river, a tributary of the Brahmaputra, in the country’s mountainous northeast. When complete in 2028 it will generate up to 2.9GW of electricity from 12 turbines, and will also moderate flooding during India’s monsoon season. Link The government of India is planning to begin 100 airport projects by the end of next year. Airports Authority of India and other airport operators have targeted a capital outlay of approximately $13bn in the airport sector across India by 2025 for the construction of greenfield airports and terminals, the expansion and modernisation of existing terminals and the strengthening of runways, among other activities.

French infrastructure company NGE has signed a contract to help build a 330km high-speed railway in Egypt. When Orascom and Arab Contractors won the project from the National Authority for Tunnels, the value was given as $4.5bn.

Link Saudi Arabia’s Municipal, Rural Affairs and Housing Ministry has announced that all new residential buildings across the Kingdom will only receive approval if they include earthquake-resistant designs. The new instructions were issued by the ministry to its affiliated agencies and engineering offices for new residential buildings in various regions and governorates across the country.

Oman-Etihad Rail Company has signed an agreement with Abu Dhabi’s Mubadala Investment Company for the development of a UAE-Oman rail link. Oman-Etihad Rail Company is a joint venture  of Oman Rail and Etihad Rail. The overall investment value of the UAE-Oman 303 km rail link is $3 billion.

Kuwait is reported to have approved nearly US$2.76 billion for 110 projects that are planned to begin in the fiscal year 2023-2024. Arabic language daily Alqabas newspaper has reported that 55 of those projects would be launched in 2023. The 55 projects said to be undertaken in 2023, covering construction, services and other sectors, have a combined value of around US$871 million, with Alqabas adding that construction projects this year are worth around US$775.5 million.

14Trees, a joint venture company between Holcim and British International Investment, has announced some of the initial results of their efforts to 3D print up to 52 houses in Kilifi, Kenya, using a single BOD2 printer from Cobod. Following the start of the project in October 2022, 14Trees completed the 3D printing of the walls of 10 houses in January 2023 after just 10 weeks using only one printer.

The construction technology industry showed resilience in the face of adverse economic conditions across the world as investment during 2022 held steady at around $5.38 billion, just under the $5.4 billion from 2021. Over 80% of investment in the market was in North America and Europe in 2022. Within those regions, the most active country was the United States, where 97 startups have their headquarters and 42.5% of all contech investment dollars flowed. This is more than four times the amount of investment in the next most active country, the United Kingdom, which had 20 startups and 8.8% of funding dollars.

Holcim is to acquire thermoplastic roofs manufacturer FDT Flachdach Technologie GmbH. The purchase, the latest in a string of recent acquisitions, will mean its roofing systems will exceed $4 billion in net sales ahead of schedule.

Projects in Africa and Latin America helped to drive a 47% increase in turnover and 31% jump in profit in 2022 for a Portuguese Mota-Engil. The construction company, which is based in Portugal and part-owned by China Communications Construction Company saw turnover rise to €3.8 billion in 2022. Earnings before interest, taxation, depreciation and amortisation (EBITDA) were €541 million, up 31% on 2021’s figure.

Rising costs have eaten into profits at Spanish infrastructure firm Ferrovial’s construction division. The business saw its earnings before interest (EBIT) fall from €132 million in 2021 to €63 million in 2022. Ferrovial blamed the impact of inflation on the prices of supplies and subcontracts. Meanwhile its construction revenue increased by 2.2% in like-for-like terms to €6.5 billion.

Buzzi Unicem recorded consolidated sales of €4bn in 2022, up by 16% year-on-year from 2021 levels. The producer’s EBITDA rose by 22% year-on-year. The earnings figure is 33% higher than Buzzi Unicem’s previous full-year 2022 EBITDA forecast. t Group’s cement sales fell by 9.2% to 28.3Mt.

Kingspan Group revenues were up 28% to €8.3bn for the calendar year, ahead of forecasts, while trading profit was up 10% to €833mln, in line with estimates as profit margins were squeezed. Acquisitions contributed 9% to sales growth and 8% to trading profit growth in the year.

Fluor earned $9 million in the fourth quarter of 2022, up from a net loss of $278 million in the fourth quarter of 2021. Revenue for the fourth quarter hit $3.7 billion, about a 2.8% increase. Ending backlog for 2022 totalled $26 billion, a 25% jump from the prior year.