Steel Markets
Will Construction be the Comeback Kid - The View From Platt's Steel Market North America Conference
Written by John Packard
March 23, 2014
SMU’s John Temples attended the Platts Steel Market’s North America Conference this week. Panelist focused on market forecast, natural gas, service center operations, and a healthy dose of business promotion. One discussion of interest was on the recovery and outlook of the construction sector.
Throughout the conference, many people were optimistic about the non-residential construction sector. According to one analyst speaking at the Platts steel North America Conference, it seems that end markets are poised to improve. The nonresidential construction market could experience a 6-8 percent growth rate.
The last voice of the conference challenged these projections. While many touted the comeback of non-residential construction as a potential leader in market recovery, John Cross, vice president of market development and finance at the American Institute of Steel Construction, disagreed. When posed with the question of “will construction be the comeback kid,” Cross answered with a confident and informed “No”.
While others were optimistic with non-residential construction growth of 6-8 percent, Cross reminded us that construction is still 48 percent below the 2006/2007 peak. While we can historically rely on the non-residential construction sector to lead the way in recovery, Cross felt we are currently coming from too low of a base.
What key factors must be strengthened to improve growth? According to Cross, employment levels must increase, and a GDP of greater than 3 percent must be sustained. Which construction sectors are likely to lead the way in the initial growth? Industrial and multi-story residential construction. Considering all of this, Cross feels that we will see an 11 percent increase over 2013 levels and perhaps a cycle peak by 2017/2018.
John Packard
Read more from John PackardLatest in Steel Markets
Steady architecture billings signal improving conditions
The November ABI decreased month over month but was still the third-highest reading of the past two years.
Fitch warns more tariffs will pressure global commodity markets
“New commodity-specific tariffs, mainly on steel and aluminum products, could widen price differentials and divert trade flows,” the credit agency forewarned.
Slowing data center, warehouse planning drives decline in Dodge index
The Dodge Momentum Index (DMI) slid further in November as planning for data centers and warehouses continued to decline.
Latin America’s steel industry grapples with declining demand, rising imports
With climbing imports and falling consumption, the Latin American steel industry has had a challenging 2024, according to an Alacero report.
CRU: Trump tariffs could stimulate steel demand
Now that the dust has settled from the US election, as have the immediate reactions in the equity, bond, and commodity markets, this is a prime opportunity to look at how a second Trump presidency might affect the US steel market.