September constructsteel newsletter

US Construction planning drops for fifth month on interest rates, lending issues. The Dodge Momentum Index, a benchmark that measures nonresidential building planning, dropped nearly 1% in July due to tighter lending standards and higher interest rates. The commercial component ticked down 0.2%, while the institutional component fell 1.9% in July. But compared to the beginning of the year, commercial planning fell 10%, whereas the institutional segment gained 16%.

Associated Builders and Contractors (ABC) Construction backlog increased about 4.5% in July to 9.3 months due to growth in commercial and institutional activity. ABC’s backlog reading measures the work that contractors have booked but have not yet begun. The reading remains up about 6.9% over the past year. The jump in July follows two months of no movement in the backlog level, largely due to drops in heavy industrial projects offsetting gains in other categories.

UK Construction inflation continues to soften, according to latest data from the Office for National Statistics. The annual rate of construction output price growth (inflation) was 4.6% in the year to June 2023. This has slowed over the past year from the record rate of 10.4% seen in May 2022.

Germany’s cabinet earmarked EUR57.6 Bn (USD62 Bn) for green investments next year, up 60.2% from a 2023 target, as Berlin ramps up subsidies to help the country become net zero by 2045.The lion’s share of next year’s Climate and Transformation Fund will go to Germany’s building sector, with EUR18.9 Bn (USD20 Bn) for subsidies in renovations and new construction in 2024.

Egypt’s General Authority for Investment and Free Zones (GAFI) approved an investment of 0.5 Tn Egyptian Pound (USD16 Bn) for the establishment of a new industrial city under the Investment Zones system in Giza governorate. The new city is also expected to create 750,000 direct job opportunities.

Kuwait has approved nearly 13.8 Bn Kuwaiti dinars (USD45 billion) in allocations to build new cities and develop its infrastructure. The projects include Mutlaa and South Abdullah Al-Mubarak cities, construction of a new airport terminal and expansion of its facilities, Mubarak Al-Kabeer Port, seven electricity projects, and the planned rail network, the report said.

India’s booming construction sector, being driven by expanding urban housing demand and state spending on infrastructure such as roads, could add up to 30 million jobs by March 2030 to the current 70 million. The real estate sector, which suffered massively during the two years of pandemic, has been recovering fast, while state spending on the road network, ports, airports, and other infrastructure has gone up over the past few years.

America’s Associated Builders and Contractors predicts construction materials prices to remain stable. Construction input prices in the US were unchanged in July relative to the previous month, while non-residential construction input prices fell 0.1% for the month. Overall construction input prices are 3.1% lower than a year ago, while nonresidential construction input prices are 2.7% lower.

The latest Builders Merchants Building Index (BMBI) report shows that price growth in building materials is slowing and there are signs of volume recovery. In the second quarter of 2023 the amount of product sold (volume) across Britain was 13.5% lower than in the same quarter of 2022. The value of those sales was down 4.1% year on year. While both numbers represent a further fall in business for builders’ merchants, and thus a slowdown in UK construction, particularly repair, maintenance & improvement (RMI), the numbers are smaller than they were in the first quarter. Volumes were down 16.4% in the first quarter, year-on-year.

Cemex Poland launched Building Information Modelling (BIM) tools to help architects and engineers choose innovative and more sustainable solutions. Cemex Poland developed a series of unique BIM solutions for designing and managing construction projects. These digital tools support customers by identifying the best Cemex products and solutions and enables the selection of the most innovative, cost-efficient as well as sustainable choice.

Cement sales in Brazil decreased by 0.5% YoY to 5.476Mt in July 2023 from 5.503Mt in the year-ago period, according to the national cement association. While the main markets of the southeast and northeast saw a pick-up in demand to 2.573Mt (+1.5% YoY) and 1.088Mt (+6.5% YoY), respectively in July 2023, other regions saw a contraction of sales. The association attributed the decrease in sales to the instability of the country’s economy, marked by a prolonged scenario of high interest rates, high household indebtedness and a drop in real estate launches.

Dubai Central Laboratory is deploying artificial intelligence (AI) robots to speed up the testing of building materials. The robots use x-rays to carry out chemical analysis of construction materials and cement products, reports Trade Arabia. The cement testing services are linked to a smart platform, enabling customers to receive analysis reports quickly via smartphone, tablet, or mobile device. According to the Dubai Central Laboratory, the introduction of the robots has shortened testing times from four days to eight minutes, resulting in a 650% increase in the number of samples examined on a daily basis.

A new technique developed by scientists in Australia can upcycle waste coffee grounds to make up to 30% stronger concrete. The method, called pyrolysis, aims to divert a majority of coffee waste for use in construction projects rather than being dumped in landfills to promote environmental betterment. The team has produced biochar, a lightweight residue similar to charcoal and used it to replace a portion of the sand required to make concrete, from waste coffee grounds.

Fluor earned USD61 Mn in the second quarter of 2023, compared to a USD66 Mn profit a year ago, with leading performance from its energy and urban solutions segments, according to the company’s Q2 earnings report.

Revenue for the second quarter hit USD3.94 Bn compared to USD3.3 Bn a year ago, about a 19.4% increase. Backlog reached USD25.48 Bn, a 30.5% jump from USD19.52 Bn in Q2 2022.

Tutor Perini reported a USD37.5 Mn loss in the second quarter of 2023 last week, compared to a loss of USD 63Mn a year earlier, on improved revenue of USD1.02 Bn, a 19% increase from the same period in 2022, according to a news release. The company attributed the red ink to difficulties in its building and specialty contractor units, where it lost USD14 Mn and USD70 Mn, respectively, due to unfavorable adjustments and changes in estimates and expected recovery of unapproved change orders.

Jacobs announced Tuesday it earned USD164.24 Mn in its fiscal third quarter of 2023, about a 16% drop from USD195.98 Mn in profits a year ago, according to the company’s earnings report. Revenue for its third quarter jumped to USD4.19 Bn compared to USD3.83 Bn in the prior year, up more than 9%, due to strong momentum from trends such as critical infrastructure, water scarcity, energy transition and onshoring.

AECOM lost USD134.7 Mn in the third quarter, compared to USD101.9 Mn in profits a year ago, on USD3.66 Bn in revenue, a 13% increase year over year, according to its fiscal third-quarter earnings report. The Dallas-based global contractor’s backlog stood at USD41.63 Bn, driven by increased activity in its design business. That was up 1.2% YOY but down slightly from the firm’s record backlog of USD41.9 Bn last quarter.

Balfour Beatty’s pre-tax profit dipped to GBP82 Mn (USD104 Mn) for the first half of 2023, down from GBP83 Mn (USD105 Mn) a year ago, on a 9% increase in revenue to GBP 4.5Bn (USD6 Bn). The contractor’s U.S. segment took a hit due to weakness in the office and technology sectors. The firm’s backlog fell to GBP16.4 Bn (USD21 Bn), a 7% decrease from last year’s mark of GBP 17.7Bn (USD22 Bn).

Lendlease announced an AUD232 Mn (USD 150Mn) statutory loss for its fiscal year 2023, a widening from its AUD99 Mn (USD64 Mn) loss a year earlier. The contractor reported AUD22.9 Bn (USD15 Bn) in work in progress, up 24% compared to fiscal year 2022, and AUD8.7 Bn (USD5.7 Bn) in external construction backlog, down 17% from last year. The company blamed poor performance on the U.K.’s Defective Premises Act, wherein the British government extended the period of defect claims for residential buildings from six to 30 years.

Saint Gobain India, a leading glass maker and a player in housing solutions business, is investing Rs 8,000 crore (USD 970Mn) in 4-5 years to fund capital expenditure and acquisitions to fuel growth. It comes in the backdrop of India emerging as the third largest profitable market after the US and France for Saint-Gobain, which has operations in 75 countries.