Steel Markets
Residential Leads Construction Spending in August
Written by Sandy Williams
October 1, 2020
Construction spending rose 1.4 percent in August primarily due to a robust residential construction sector, said the Associated General Contractors of America. AGC cautioned that without federal support, nonresidential construction will continue to stagnate.
“The August spending report shows a stark divide between housing and nonresidential markets that appears likely to widen over the coming months,” said AGC Chief Economist Ken Simonson. “With steadily rising business closures and worker layoffs, and growing budget gaps for state and local governments, project cancellations are likely to mount and new starts will dwindle.”
Construction spending totaled $1.41 trillion at a seasonally adjusted annual rate in August. Residential spending jumped 3.7 percent, while total nonresidential spending slipped 0.1 percent.
Private nonresidential construction spending fell in nine out of 11 categories, contracting 0.3 percent from July to August. Commercial construction and power construction, two of the largest segments, each fell 1.1 percent. Manufacturing construction spending expanded 2.2 percent, but office construction slipped 0.3 percent, said AGC.
Public spending overall inched up 0.1 percent in August, but has been on a downward trend since March, falling 2.5 percent.
Housing construction has been robust with contractors having difficulty keeping up with demand. Private residential construction spending rose 3.7 percent in August, supported by a 5.5 percent gain in single-family homebuilding and a 3.0 percent gain in home improvements. Multifamily construction spending was fairly static with a 0.1 percent decline from July.
“One of the biggest challenges facing the construction industry is the lack of demand for many new types of commercial and local infrastructure projects, especially after the current crop of projects is completed,” said Stephen E. Sandherr, AGC’s chief executive officer. “Washington officials can give a needed boost to construction demand and employment by boosting infrastructure and putting in place liability protections for firms that are protecting workers from the coronavirus.”
Sandy Williams
Read more from Sandy WilliamsLatest in Steel Markets
Steel Summit: Schneider sees SDI ‘on the edge of a very good run’
Steel Dynamics Inc. (SDI) President and Chief Operating Officer, Barry Schneider, remains bullish about the Fort Wayne, Ind.-based steelmaker’s position in the current market.
Sheet market participants say sales still in a slump
Across the US and throughout the steel supply chain, market participants are reporting another painfully quiet week for hot-rolled (HR) coil sales.
CRU: Lower sheet prices have pulled back demand for imports
Domestic sheet prices in the US remained under pressure, limiting interest in imports, while domestic prices for longs products continued to rise.
President Trump intends to set additional steel tariffs
While boarding Airforce One on Friday, US President Donald Trump stated that he would be setting more steel tariffs and putting ~100% tariffs on semiconductors and chips.
USS, government officials give update on Clairton Coke Works incident
U.S. Steel, Allegheny County executive Sara Innamorato, and Pennsylvania Gov. Josh Shapiro clarified details from early reports about the Clairton Coke Works facility explosion just one day earlier.