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 market participants mull the impact of US/Mexico S232 negotiations
Steel market participants learned that negotiations between the US and Mexico include discussions about Section 232 tariffs on steel and aluminum despite President Trump’s June 3 proclamation increasing the tariffs from 25% to 50% for all steel and aluminum imports—except for those from the UK.
ArcelorMittal plans wire-drawing closure in Hamilton, shifts production to Montreal
ArcelorMittal’s (AM) Hamilton location to be shuttered, wire production shifting to Montreal.
Tariffs, ample domestic supply cause importers to shift or cancel HR import orders
Subdued demand is causing importers to cancel hot-rolled (HR) coil orders and renegotiate the terms of shipments currently enroute to the US, importers say. An executive for a large overseas mill said customers might find it difficult to justify making imports buys after US President Donald Trump doubled the 25% Section 232 tariff on imported steel […]
CRU Insight: A 50% S232 tariff will raise US steel prices and shift trade flows
This CRU Insight examines how the increase in Section 232 tariffs on steel to challenging levels will lead to significatively higher prices for end consumers in the US market.
Steel market shakes tariffs off amid weak demand
Service centers and distributors contend that weak demand is to blame for the flattening of domestic steel spot prices, as reflected in Nucor Steel’s weekly Consumer Spot Price (CSP) notice. On Monday, the Charlotte, North Carolina-headquartered steel producer left prices unchanged from the previous week. Nucor has maintained prices of plate produced in Brandenburg since March 28.