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

CRU: China’s indirect steel exports find new destination markets
The boom in China’s direct steel exports has not stopped this year, even with a rise in protectionist measures globally. The increase is driven by...

Great Lakes iron ore cargoes down in September as Cleveland tonnage slips
Iron ore shipments from US Great Lakes ports fell sharply in September, per the latest from the Lake Carriers’ Association (LCA) of Westlake, Ohio.

HVAC equipment shipments down through August
Although total HVAC shipments fell in August, YTD volumes remain relatively strong. Nearly 15 million units were produced in the first eight months of the year, the fourth-highest rate in our 19-year data history.

Sheet market sources slam tariffs for prolonged demand slump
Tariffs are ultimately to blame for stagnant demand in the hot-rolled coil market, domestic market sources tell SMU.

Week in Review: Sept. 29 -Oct. 3
Let’s take a quick tour of some key stories from SMU in the week of Sept. 29 - Oct. 3.