Steel prices have risen sharply, with more increases likely if an announced 25% tariff on steel and aluminum imports goes into effect on March 12. Steel supplier ClarkDietrich notified customers on February 12 that it “will implement a price increase of a minimum of 10% on all steel products nationally effective March 3…Please be aware that with the recent announcement of the reinstatement of Steel Tariffs under Section 232, additional increases are likely forthcoming.” The firm then announced on Monday that it “will implement a price increase of a minimum of 10% on all steel products nationally effective April 1…This is in addition to the recently announced March 3rd increase.” L&W Supply informed customers on February 14 that it will increase pricing on all metal framing products effect March 14. Insteel Wire Products notified customers on Monday that it will increase prices for PC strand, pipe mesh, engineered structural mesh and drawn wire on March 10. Readers are invited to send price announcements to ken.simonson@agc.org.
“The power industry has already been experiencing a shortage of transformers, for which demand is expected to jump even more in the coming years,” the Wall Street Journal reported online on Thursday. “Suppliers have been reluctant to invest large sums of capital to expand production capacity because such investments have long break-even timelines, according to a report from Wood Mackenzie….Only about 20% of transformer demand can be met by the domestic supply chain, according to Wood Mackenzie, which also estimated that transformer prices have already risen 70% to 100% since January 2020 because of inflation for raw materials such as electrical steel and copper. Steel is also an essential component of transformers, and notably, Cleveland-Cliffs is the only domestic producer of grain-oriented electrical steel for them. Assuming that Trump moves ahead with 25% tariffs on Canada and Mexico, and imposes tariffs on copper as well, Wood Mackenzie estimates that transformer prices could increase by an additional 8% to 9%.”
Housing starts (units) in January declined 9.8% from December and 0.7% year-over-year (y/y) at a seasonally adjusted annual rate, the Census Bureau reported on Wednesday. Single-family starts fell 8.4% for the month and 1.8% y/y. Multifamily (five or more units) starts skidded 11% for the month but rose 2.3% y/y. Residential permits inched up 0.1% in January but declined 1.7% y/y. Single-family permits were unchanged for the month but declined 3.4% y/y. Multifamily permits fell 1.4% in January but edged up 0.2% y/y. Multifamily units under construction declined for the 16th month in a row, by 2.1%, and 22% y/y.
“For 2024, the total number of multifamily permits issued nationwide reached 498,533,” 13% below the 2023 total, the National Association of Home Builders posted on Monday based on an analysis of Census data. “…22 states recorded growth in multifamily permits, while 28 states and the District of Columbia recorded a decline. New York…led the way with a sharp rise in multifamily permits [129%], while Idaho had the biggest decline,” -53%. The states with the highest number of multifamily permits issued all experienced steep declines: Texas, -19%; Florida, -27.5%; and California, -26%. Of the metros with the most multifamily permits, permits rose 62% in New York-Newark-Jersey City and 5% in Dallas-Fort Worth-Arlington but plunged 28% in Austin-Round Rock and 26% in Phoenix-Mesa-Scottsdale.
The Architecture Billings Index (ABI) rose from 44.6 in December, seasonally adjusted, to 45.6 in January, the American Institute of Architects (AIA) reported on Wednesday. “Any score below 50.0 indicates decreasing business conditions….Firms with a commercial/industrial focus reported the most significant decline in business conditions, but weakness was observed across all sectors.”
“Beneath a climbing national vacancy rate [for warehouses] lies a growing divide between sprawling distribution centers and much smaller warehouses, the Journal reported on Wednesday. “The vacancy rate for U.S. warehouses under 100,000 square feet was 3.9% in the fourth quarter, far below the 6.7% overall vacancy rate, according to real-estate services firm Cushman & Wakefield. That was also less than half the 10.1% vacancy rate for buildings of more than 100,000 square feet….One part of the problem is that over the past five years developers have focused on constructing big buildings of more than 100,000 square feet to accommodate growing e-commerce operations. Smaller warehouses have been less desirable to build, in part because they are often in urban and suburban areas where space is tight and land is expensive. About 8% of the new warehouses built last year were less than 100,000 square feet, according to Cushman.”
Georgia “is now one of the fastest-growing markets in the U.S. for data centers,” ConstructConnect reported on Monday. “In 2024, Atlanta was the top city in the U.S. for new facilities. As of mid-2024, data center construction had increased 76% in the Atlanta market compared to the same time in 2023. The state has nearly 160 major [data centers] and is now gearing up for 11 more additions.”
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