Steel construction output to return to growth in 201130.06.2010

Output for the steel construction industry in 2011 is forecast to increase to 0.94 million tonnes, up from a figure of 0.88 million tonnes in 2010, and 0.92 million tonnes in 2009.

Speaking at the Annual Lunch of the British Constructional Steelwork Association (BCSA) held at Drapers Hall, London on 29 June, BCSA President Jack Sanderson, said: “The past year has been the most difficult one for the steel construction industry for the past 20 years

“Steel construction companies have taken the painful steps to adjust to the reduced workload levels, whilst preserving their essential capabilities for the upturn. Steel’s market share is holding up and the underlying long term demand for steel construction remains sound. Members are well placed to respond quickly to the recovery which is expected to start next year, although the pace of recovery is likely to be modest.”

The brunt of the fall in the steel construction sector has been felt by the private sector, but public sector projects such as schools, hospitals and infrastructure have held up. Steel is still emerging from the recession, however, as the framing material of choice for the multi-storey buildings market. The 2009 Market Share Survey conducted by independent researcher Construction Markets showed that in the non-residential multi-storey sector structural steel frames held a market share of 69%.

Over the coming years new infrastructure investment, including power generation plants, will provide opportunities for BCSA members in the medium to long term.

On the subject of steel prices, Mr Sanderson said they place significant challenges on members when tendering for fixed price contracts. Steelmakers are in a difficult position with the volatile ore and coke prices and the change from annual to quarterly price agreements, driven by the mining companies.

“The BCSA has endeavoured to give its members maximum notice of price increases and has also put pressure on steelmakers to keep the increases to a minimum, combined with the longest possible period between increases,” he said.

Mr Sanderson announced that the BCSA’s joint co-operation with Corus has now taken a major step forward with the signing of a Steel Construction Market Development Agreement. This commits the BCSA and Corus to the long-term funding of research and market development, under the direction of a new Joint Market Development Board. As part of the agreement approximately 10 Corus staff will join BCSA on long-term secondment.

Principal guest speaker at the BCSA Annual Lunch was Paul Morrell, the Government’s Chief Construction Adviser. Mr Morrell said the construction industry as a whole faced maior challenges and did not yet have a fully developed plan for its own future. The two biggest challenges were to eliminate waste and to achieve low carbon targets.

Mr Morrell praised the BCSA’s Steel Construction Sustainability Charter, saying the idea of progressing through its various levels from Member to Gold as sustainability performance improves was a good one.