September constructsteel newsletter

The US Senate has passed the $1.2 trillion Infrastructure investment and Jobs Act by a 69-30 margin. The bill, which includes $550 billion in new infrastructure spending over the next five years, represents the largest new federal investment in the country’s roads, bridges and highways in decades. Measures in the legislation include $110 billion for improvements to roads and bridges and $66 billion for passenger and freight rail projects, in addition to expanding broadband access and electric vehicle capabilities across the country. The bill also includes $100 million over five years to accelerate the deployment of digital construction technologies such as 3D modelling software and digital project management platforms.

The Global Alliance for Buildings and Construction has published a report that identifies 10 key measures that national, subnational and local governments need to incorporate, in order to move forward with efforts to decarbonise the building sector. While the report does not provide a “comprehensive strategy”, the measures it outlines are designed to help governments, local authorities and construction sector organisations achieve net-zero targets.

According to Off-Highway Research, global construction equipment sales are expected to hit 1.13 million units (2% higher than the previous record achieved in 2018), with a value of almost US$110 billion this year. The record-high sales will come about due to the stimulus response to the virus by governments around the world, most significantly in China. In the UK, ongoing materials and labour shortages are likely to worsen while turnover is predicted to grow through the rest of 2021. Specialist contractors are particularly concerned about lack of skilled staff able to meet growing demand for the sector’s services – there are shortages of skilled labour in all specialist sectors, and this is pushing up labour costs. Nearly two-thirds of survey respondents said they expect the ongoing shortages of materials and equipment to deteriorate as the year goes on.

The construction industry in India will enjoy strong growth due to the government’s National Infrastructure Pipeline (NIP) and ambition to make India a US$5 trillion economy by 2024, according to a report by India Infrastructure Research. NIP has projected a capital expenditure of US$1.5 trillion to be spent from 2019-25. Over 70% of this has been allocated to four infrastructure sectors: energy (24%), roads (19%), urban infrastructure (16%) and railways (13%).

Australia’s booming construction industry could be impacted by China’s move to restrict steel production, with rising prices impacting the essential material used to build houses as well as threats to supply. There are reports that Beijing is also planning to slap on extra taxes to steel imports, which would further push prices up, making many Aussie importers nervous about ordering from China. With Australia importing a third of its steel needs, the Australian Steel Association’s CEO David Buchanan warned the material is also becoming more challenging to source due to COVID-19’s impact on shipping causing port congestion.

The top three performing construction sectors so far in 2021 are data centres, transport, and industrial, manufacturing and distribution, according to Consultant Turner & Townsend’s International Construction Market Survey 2021. The top performing sector across all participating markets is data centres, driven by the growth in technology and digitalisation. COVID-19, labour shortages and Government red tape, bureaucracy, and delayed approvals have been listed among core industry challenges.

Global construction output is expected to see a growth of 5.7% in 2021, according to GlobalData. This predicted growth would be a robust figure, given that the industry saw a 2.4% decline in 2020 and that cases of those infected with COVID-19 is still high around the world. Many markets have managed to regain growth momentum and have already returned to pre-COVID-19 levels. Out of 65 countries, 25 had recorded year-on-year growth in the first quarter of 2021, including China, France, Italy, India and Saudi Arabia.

Formwork and scaffolding maker Peri has announced that Germany’s first printed house is ready for occupancy. The 160 sq m, two-storey house was created using a Cobod Bod2 printer – printing began in September 2020, using printing mortar from HeidelbergCement with mixing technology from German construction firm M-tec Mathis Technik.

In the UK, building materials prices rose 4.5% in July 2021 compared to the previous month and by 20.1% year-on-year. The construction materials price index is at its highest point since current records began in 1996. The materials showing the steepest price increases over the year were imported plywood (up 81.7%), fabricated structural steel (64.7%) and imported sawn or planed wood (64.2%).

In the US, non-residential construction input prices are up 23.4% since this time last year, according to an Associated Builders and Contractors. For July, non-residential construction input prices increased 0.8% since the month before. While softwood lumber saw a 29% dip in prices since the previous month, prices for steel mill products, which increased 10.8% in July alone, are up 108.6% for the year.

Skanska is planning to use 3D-printed concrete in its work on HS2, a high-speed rail system reported to cost as much as $147 billion, under construction in the U.K. The joint venture between Skanska, U.K. civil contractor Costain and Austrian contractor Strabag will employ a technology called “Printfrastructure” that will print concrete structures on site instead of shipping them in prefabricated slabs or mixing and pouring it at the location. The machine is also capable of going into physically restricting spaces, removing the costs of sending people in to do the same job. Proof-of-concept trials are due to begin next spring.

US construction tech player Trimble has announced the creation of Trimble Ventures, a venture fund focused on investing in early and growth stage innovative companies. The fund will seek to accelerate the digital transformation of the agriculture, construction, geospatial and transportation industries. It will launch with US$200 million allocated for investments and focus on companies with the potential for technology-enabled innovation and disruption in the digital transformation of the industries Trimble serves.

Dutch construction company Royal BAM Group reported revenue increase by 17% to €3.6 billion in the first half year of 2021 compared to the same period last year. Easing of the lockdowns causes by the COVID-19 pandemic and the company’s cost reduction programme initiated in September 2020 resulted in a strong recovery. The company said it saw a very strong performance from the Dutch construction and property sectors.

The half-year 2021 results from Switzerland-based materials giant Holcim show record breaking growth in earnings, with EBIT (earnings before interest and tax) at 72.2%, while free cash flow increased by 9% compared to the same period in 2020. In the second quarter alone, Holcim reported 33.2% year-on-year growth in net sales and 56.1% growth in EBIT. From a European perspective, the company said it had seen a strong recovery in the UK, plus “solid demand in France and continuous growth in Eastern European markets”.

French construction and concessions giant Vinci has released its financial results for the first half of 2021, showing a strong increase in revenue and earnings. Revenue for the whole company in the first half of 2021 totalled €22.6 billion, up 22.3% on an actual basis relative to the first half of 2020. The upturn was particularly strong in France, where business levels in the previous year were badly affected by the first lockdown; outside France, revenue was up 19% compared with the first half of 2019.

UK modular housing manufacturer CoreHaus has opened its first manufacturing facility and begun full production of its steel-framed modular homes. One of the newest modular house builders in the country, the company is a joint venture firm made up of Carlton & Co Group and public procurement specialist Fusion21.

Multinational modular workspace company Modulaire has completed the acquisition of Italian modular building company Tecnifor which includes the Locabox and FAE businesses – all provide modular buildings, with a fleet of 12,000 units targeted at the construction and public administration sectors. The acquisition comes as Modulaire goes through the process of a change in ownership, with long time private equity owner TDR Capital selling the business to investment firm Brookfield Business Partners in a deal worth US$5 billion.

The start of the second half of 2021 saw M&A activity accelerating across the wholesale distribution space and continued a recent trend of numerous deals in the building materials and construction vertical in the US. Companies like US LBM Holdings continued to snatch up businesses, making three acquisitions during the month. L&W Supply, SRS Distribution, Builders First Source and GMS also grew through acquisition as the sector continues to consolidate.