September constructsteel newsletter

Construction market trends

United States

X Values ABI (LHS) Output (RHS, %, y-o-y)
Jan-19 55.3 -1.72
Feb-19 50.3 -2.65
Mar-19 47.8 1.01
Apr-19 50.5 1.84
May-19 50.2 3.79
Jun-19 49.1 8.06
Jul-19 50.1 10.30
Aug-19 47.2 11.23
Sep-19 49.7 12.31
Oct-19 52 13.18
Nov-19 51.9 17.26
Dec-19 52 13.57
Jan-20 52.2 14.17
Feb-20 53.4 11.79
Mar-20 33.3 8.34
Apr-20 29.5 3.19
May-20 32 0.35
Jun-20 40 -0.45
Jul-20 40 -2.85
Aug-20 40 -6.64
Sep-20 47 -7.42
Oct-20 47.5 -7.26
Nov-20 46.3 -9.59
Dec-20 42.3 -8.84
Jan-21 44.9 -7.07
Feb-21 53.3 -7.36
Mar-21 55.6 -3.83
Apr-21 57.9 -1.02
May-21 58.5 -0.74
Jun-21 57.1 -0.69
Jul-21 54.6 0.68
Aug-21 55.6 2.30
Sep-21 56.6 3.01
Oct-21 54.3 3.27
Nov-21 51.0 7.09
Dec-21 52.0 7.61
Jan-22 51.0 9.99
Feb-22 51.3 13.19
Mar-22 58.0 11.48
Apr-22 56.5 16.75
May-22 53.5 18.43
Jun-22 53.2 18.61
Jul-22 51.0 21.71
Aug-22 53.3 23.08
Sep-22 51.7 25.66
Oct-22 47.7 25.34
Nov-22 46.6 25.68
Dec-22 48.4 27.97
Jan-23 49.3 24.58
Feb-23 48.0 24.00
Mar-23 50.4 24.90
Apr-23 48.5 23.68
May-23 51.0 21.91
Jun-23 50.1 20.71
Jul-23 50.0 16.38
Aug-23 48.1 17.31
Sep-23 44.8 14.46
Oct-23 44.3 14.07
Nov-23 45.3 13.32
Dec-23 45.4 10.97
Jan-24 46.2 11.09
Feb-24 49.5 9.33
Mar-24 43.6 7.27
Apr-24 48.3 4.38
May-24 42.4 4.91
Jun-24 46.4 4.66
Jul-24 48.2 4.49

US construction spending declined more than expected in July as elevated mortgage rates and higher supply negatively impacted single-family homebuilding. Private non-residential output e.g. factories dropped -0.4%.

Private residential output was down -0.4% m-o-m (7.7% y-o-y) in July; Building permits were down -3.3% m-o-m (-6.3% y-o-y) in July.

Private non-residential output was down -0.4% m-o-m (4.5% y-o-y) in July. Architecture Billings Index (ABI) up to 48.2 in July from 46.4 in June (< 50, contraction).

China

X Values Series1
Jan-19 -1.90
Feb-19 -0.86
Mar-19 -1.40
Apr-19 -0.25
May-19 -1.27
Jun-19 -2.33
Jul-19 -2.30
Aug-19 0.58
Sep-19 2.90
Oct-19 3.11
Nov-19 2.01
Dec-19 0.07
Jan-20 -6.38
Feb-20 -15.49
Mar-20 -28.55
Apr-20 -19.28
May-20 -8.53
Jun-20 3.19
Jul-20 6.34
Aug-20 7.45
Sep-20 9.85
Oct-20 11.68
Nov-20 11.25
Dec-20 12.67
Jan-21 20.60
Feb-21 35.73
Mar-21 36.64
Apr-21 22.52
May-21 10.58
Jun-21 10.97
Jul-21 3.39
Aug-21 -3.96
Sep-21 -12.52
Oct-21 -16.65
Nov-21 -16.07
Dec-21 -16.80
Jan-22 -14.05
Feb-22 -13.16
Mar-22 -13.78
Apr-22 -23.32
May-22 -28.53
Jun-22 -28.03
Jul-22 -25.19
Aug-22 -22.29
Sep-22 -22.06
Oct-22 -20.27
Nov-22 -24.08
Dec-22 -29.91
Jan-23 -27.17
Feb-23 -19.69
Mar-23 -3.54
Apr-23 -5.79
May-23 -10.64
Jun-23 -21.93
Jul-23 -24.69
Aug-23 -25.96
Sep-23 -22.18
Oct-23 -21.17
Nov-23 -20.38
Dec-23 -21.75
Jan-24 -22.91
Feb-24 -23.97
Mar-24 -24.30
Apr-24 -21.62
May-24 -19.27
Jun-24 -14.61
Jul-24 -13.93

China’s residential property market continues to adjust to structurally lower demand despite protracted efforts by the authorities to inject stimulus. Railway and civil aviation construction supporting overall construction.

The 3-month moving average y-o-y decline in floor space reached -21.5% in July; floor space sold was down -13.9% y-o-y.

Europe

X-values PMI (LHS) Output (RHS, %, y-o-y)
Jan-19 50.6 0.5
Feb-19 52.6 6.2
Mar-19 52.2 6.7
Apr-19 52.1 3.1
May-19 50.6 2.6
Jun-19 50.8 1.6
Jul-19 50.6 1.1
Aug-19 49.1 0.9
Sep-19 50.5 0.7
Oct-19 50.7 0.7
Nov-19 50.6 0.8
Dec-19 51.3 -1.1
Jan-20 51.9 4.6
Feb-20 52.5 0.0
Mar-20 33.5 -15.5
Apr-20 15.1 -30.2
May-20 39.5 -11.1
Jun-20 48.3 -4.6
Jul-20 48.9 -3.5
Aug-20 47.8 -0.4
Sep-20 47.5 -2.7
Oct-20 44.9 -2.0
Nov-20 45.6 -0.8
Dec-20 45.5 1.2
Jan-21 44.1 -4.9
Feb-21 45.0 -5.5
Mar-21 50.1 17.7
Apr-21 50.1 42.5
May-21 50.3 12.7
Jun-21 50.3 5.1
Jul-21 49.8 3.5
Aug-21 49.5 -0.1
Sep-21 50 3.6
Oct-21 51.2 4.2
Nov-21 53.3 2.8
Dec-21 52.9 -0.2
Jan-22 56.6 6.1
Feb-22 56.3 9.0
Mar-22 52.8 3.9
Apr-22 50.4 3.1
May-22 49.2 3.5
Jun-22 47 2.5
Jul-22 45.7 1.7
Aug-22 44.2 2.9
Sep-22 45.3 1.0
Oct-22 44.9 1.2
Nov-22 43.6 1.3
Dec-22 42.6 -0.2
Jan-23 46.1 0.9
Feb-23 47.6 1.8
Mar-23 45.0 0.2
Apr-23 45.2 1.2
May-23 44.6 1.4
Jun-23 44.2 1.0
Jul-23 43.5 2.7
Aug-23 43.4 1.4
Sep-23 43.6 1.6
Oct-23 42.7 0.2
Nov-23 43.4 -0.2
Dec-23 43.6 2.5
Jan-24 41.3 0.0
Feb-24 42.9 -1.4
Mar-24 42.4 -0.4
Apr-24 41.9 -0.7
May-24 42.9 -2.1
Jun-24 41.8 0.8
Jul-24 41.4
Aug-24 41.4

Civil engineering continues to support overall construction while residential construction remains under pressure.

Eurozone construction up 1.7% m-o-m (0.8% y-o-y) in June; buildings up 1.8% m-o-m (0.3% y-o-y) in June; civil engineering up 1.1% m-o-m (3.7% y-o-y) in June.

The IHS Markit Eurozone Construction PMI remained unchanged at 41.4 in August (< 50, contraction).

India

X Values Avg industrial production (y-o-y)
Jan-19 1.4
Feb-19 1.8
Mar-19 5.0
Apr-19 4.3
May-19 2.9
Jun-19 0.2
Jul-19 2.0
Aug-19 -0.7
Sep-19 -5.7
Oct-19 -5.4
Nov-19 0.3
Dec-19 0.9
Jan-20 1.4
Feb-20 5.1
Mar-20 -9.0
Apr-20 -44.4
May-20 -21.1
Jun-20 -12.1
Jul-20 -8.0
Aug-20 -7.5
Sep-20 -0.3
Oct-20 -1.8
Nov-20 -1.7
Dec-20 -0.3
Jan-21 0.7
Feb-21 -3.7
Mar-21 12.6
Apr-21 62.6
May-21 16.4
Jun-21 9.4
Jul-21 9.9
Aug-21 12.2
Sep-21 5.4
Oct-21 8.7
Nov-21 3.2
Dec-21 4.1
Jan-22 4.0
Feb-22 5.9
Mar-22 4.8
Apr-22 9.5
May-22 19.3
Jun-22 13.1
Jul-22 4.8
Aug-22 4.2
Sep-22 8.3
Oct-22 0.7
Nov-22 5.7
Dec-22 8.3
Jan-23 9.7
Feb-23 7.4
Mar-23 4.2
Apr-23 4.6
May-23 5.2
Jun-23 8.4
Jul-23 8.5
Aug-23 13.4
Sep-23 9.4
Oct-23 12.7
Nov-23 7.9
Dec-23 5.0
Jan-24 4.1
Feb-24 7.1
Mar-24 6.3
Apr-24 6.9
May-24 6.4
Jun-24 5.1
Jul-24 6.1

India’s underlying core industries continue to grow.

The weighted average of eight core industries’ output rose by 6.3% y-o-y in May; production of steel was up 7.6%, and cement was down -0.8% y-o-y.

 

Special topic

Introducing our new member CSCEC Steel

As an active member of constructsteel, CSCEC Steel aims to leverage the programme’s global platform to enhance communication across the steel structure construction industry and engage in dialogue on steel structures worldwide. Additionally, it aims to take part in the global promotion and application of steel structure buildings, contributing to the global advancement of steel-based construction solutions.

Full article

Technical trends

Delivering on construction productivity is no longer optional

The construction industry stands at a critical juncture, pivotal in driving both economic growth and sustainability. Despite its substantial size and projected expansion from $13 trillion in 2023 to $22 trillion by 2040, the sector faces significant challenges, particularly in productivity and labour shortages. Historically stagnant productivity, exacerbated by tight labour markets and an aging workforce, threatens to impede the industry’s ability to meet future demands. Technological advancements, while promising, have yet to translate into widespread productivity gains. Addressing these issues requires a multifaceted approach, including robust planning, upskilling, and strategic application of technology. By adopting transformative measures and fostering ecosystem collaboration, the construction industry can enhance its productivity and fulfill its crucial role in achieving societal goals such as net-zero emissions and affordable housing.

Full article

Construction news headlines

construction market and regulations

Europe:

UK construction site wages rose by 2.4% in Q2 2024 from the previous quarter, and 4.6% annually, according to BCIS and Hays. Skilled mechanical and electrical workers saw the highest year-on-year increase at 14.8%. Despite wage growth, job placements have declined since Q2 2021. BCIS noted that new construction orders surged by 16.5%, driven by private commercial and infrastructure projects. This increase may worsen skill shortages and push wages higher if these orders translate into actual output.

Link

Europe:

Czechia is confronting a significant shortage of essential building materials such as stone and sand due to the challenging permit process for new quarries. The depletion of existing deposits and the protracted approval timeline—up to 15 years—hinder the development of new sources. With numerous quarries closing and few new ones opening, the country faces increased reliance on costly imports. This scarcity threatens to delay major projects and escalate costs, affecting both infrastructure development and project budgets.

Link

North America:

Driven by expectations of an imminent interest rate cut, the Dodge Momentum Index surged 7.9% in July, reflecting increased planning in commercial and institutional sectors. Notably, commercial planning rose 6.8%, fuelled by data centre projects, while institutional planning surged 11.1%, led by healthcare builds. Despite a soft labor market and declining Architectural Billings Index, optimism remains high. Key projects include Microsoft’s $483 million data centre in Texas and UCSF’s $325 million Children’s Hospital renovation in California. Experts anticipate improved market conditions once rates decline.

Link

North America:

Amid recent economic pressures, the construction backlog has stagnated at 8.4 months, heavily impacting smaller contractors, according to the Associated Builders and Contractors (ABC). Firms with revenues under $50 million experienced declines, while those over $100 million saw backlog growth. Contractor confidence in profit margins has plummeted to its lowest since November 2022, amid rising costs and economic uncertainty. ABC’s Construction Confidence Index showed decreases in sales, profit margins, and staffing levels, though they remain marginally positive. Persistently high material prices and anticipated Federal Reserve interest rate cuts are expected to influence future construction spending.

Link

North America:

A survey by AGC and Arcoro reveals that 94% of contractors face significant hiring challenges, with 28% reporting at least 11 unfilled craft positions. Labor shortages have caused project delays for 54% of firms, outpacing supply chain issues. In response, 91% of companies increased pay, 57% adopted online recruitment strategies, and 51% engaged with career-building programs.

Link

Latin America:

n July 2024, Brazil’s domestic cement sales rose 6.9% YoY to 5.848Mt, driven by improved consumer confidence and sector optimism, despite high interest rates and household debt. The southeast, the country’s largest market, saw a 4.4% increase, while the northeast and south grew by 9.8% and 8.3% respectively. For January-July 2024, sales increased by 2.3% YoY to 36.409Mt.

Link

Asia:

India’s leading cement producers plan to invest US$15 billion from 2025-2027 to expand cement grinding capacity by 130Mt/yr, driven by robust demand and competitive market share goals. The cement demand is forecasted to grow at a 7% CAGR from 2025-2029. This capital expenditure surge aims to meet growing demand and enhance national presence.

Link

Building materials and construction technologies

Europe:

Case Construction Equipment has commercially released the 580EV, the first electric backhoe loader, powered by a 400-volt, 71 kWh lithium-ion battery. It offers up to eight hours of runtime, matching the performance of its diesel counterpart. This electric innovation aims to meet rising demands for sustainable, low-emission construction equipment, enhancing productivity and opening new market opportunities.

Link

Europe:

A master’s student from UCL has developed Cyanobacterial Engineered Living Material (C-ELM), which captures CO₂ through photosynthesis and converts it into calcium carbonate. These lightweight, sound-absorbing, and thermally insulating panels could significantly reduce the construction industry’s carbon footprint if widely implemented, offering a transformative approach to sustainable building practices.

Link

North America:

A new preconstruction tool has garnered significant industry recognition for its innovative approach to cost estimation. The tool, developed in collaboration with a tech consulting firm, leverages data from over 1,400 projects to deliver highly accurate cost estimates within a 1% margin of error. This technology streamlines budgeting, enhances project efficiency, and supports sustainable design, marking a notable advancement in construction technology.

Link

North America:

A construction firm utilised an AI platform to manage 21,000 documents for a major expansion project. The AI tool enabled real-time document retrieval, significantly reducing search time and preventing costly rework. Implemented in early 2024, the tool answered queries within seconds, saving 20-40 minutes per query and averting over $100,000 in monthly rework. Integration with existing project management systems was seamless, greatly enhancing project efficiency.

Link

Construction sector players

Europe:

Austrian construction giant Strabag’s order book has surpassed €25 billion for the first time, despite a challenging European market. In the first half of 2024, the company’s output volume rose by 1% to €8.3 billion. Notable regional performance included a 14% rise in order backlog in the North + West division, despite a 1% drop in output. CEO Klemens Haselsteiner highlighted significant new projects in energy transition and infrastructure, aligning with Strabag’s Strategy 2030.

Link

Europe/ Middle East:

UK-based Mace has been selected as the delivery partner for Saudi Arabia’s King Salman International Airport, set to be the world’s largest. The six-runway airport, covering 57 sq km, aims to handle over 100 million passengers annually by Riyadh Expo 2030 and the 2034 FIFA World Cup. Mace will manage project planning, construction, and sustainability, in partnership with the King Salman International Airport Development Company.

Link

North America:

WSP has agreed to acquire Power Engineers Inc. for $1.78 billion, enhancing its power and energy sector capabilities. Power Engineers, with 4,000 employees and 50 offices, will operate under its current brand. The acquisition supports WSP’s growth strategy and complements its core sectors. The deal, pending shareholder and regulatory approval, is expected to close in early Q4 2024. Link

Link

Asia:

Anhui Conch Cement recorded a decline in its net profit of 49% year-on-year in the first half of 2024, Reuters has reported. The group’s Building Materials Industry business reported a 21% year-on-year decline in its sales to US$4.71bn. Its Cement business also recorded declining sales, by 23% to US$3.87bn.

Link

Asia:

UltraTech Cement has obtained a $500m sustainability-linked loan from Sumitomo Mitsui Banking Corporation, State Bank of India, BNP Paribas and other lenders. Capital Market News has reported that the conditions for the loan align with UltraTech’s 2050 Net-Zero Roadmap.

Link

Middle East:

Emaar Properties PJSC reported an 8% YoY increase in H1 2024 net profit, reaching 5.34 billion AED ($1.45 billion), driven by strong retail and real estate demand in Dubai. Revenue rose 17% YoY to 14.4 billion AED, with a sales backlog of 90.1 billion AED as of June-end. Emaar Development PJSC saw a 56% surge in property sales to 29.7 billion AED ($8.1 billion) and a 15% rise in net profit to 2.50 billion AED. Their sales backlog stands at 74.2 billion AED.

Link

Middle East:

Red Sea International signed a $175.34 million contract with Webuild SpA to construct a staff camp for the Trojena Dam project at NEOM. The 12-month project includes prefabricated buildings, a mosque, dining halls, a clinic, and a gym, executed in two phases. Webuild previously secured a $4.7 billion contract for dam construction in January.

Link

Africa:

Lafarge Africa has reported an increase in sales and net income for the second quarter ending 30 June 2024. Sales rose from US$66.7m in the second quarter of 2023 to US$99.5m in the same period in 2024, representing a year-on-year increase of 49%. Net income also increased, from US$12.9m to US$15.2m, a year-on-year increase of 18%.

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Join industry experts and explore this year’s theme: “Positioning steel in construction.” Also, witness the second edition of the constructsteel Awards.

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