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
Metalforming manufacturers predict stagnant market: PMA Business Conditions Report
Most of the surveyed US and Canadian metalforming manufacturers expect general economic activity to remain steady over the next three months.
CRU: Global sheet prices remain under pressure as exporters undermine domestic markets
One cause of this was increased competitiveness from imports that have put pressure on some domestic producers.
CRU: Sheet import demand softens as domestic price gains have slowed
US domestic sheet price gains have begun to slow as previously pulled-forward demand has led to a decline in orders.
CMC looks beyond Arizona micro-mill woes to long-term viability of construction mart
Despite the economic and geopolitical upheaval of the last five years, CMC President and CEO Peter Matt points out that the construction market has been an essential element of the way forward.
US importers face stricter rules under revamped S232 tariffs
“CBP expects full compliance from the trade community for accurate reporting and payment of the additional duties. CBP will take enforcement action on non-compliance," the agency said in a March 7 bulletin.