Rising steel prices throughout the United States and around the world shows that demand for new construction and renovation continues to climb, according to construction industry sources.
IBISworld, a leading provider of global business intelligence and industry information, predicts a 2.2 percent increase in steel prices between 2014 and 2017. This increase is in response to additional demand for steel in the American construction industry, as well as normal price fluctuations related to steel’s position as a worldwide commodity.
Industry experts, such as IBISworld analyst Sean Windle, don’t expect the rise in steel prices to stop construction projects. Instead, the increased costs are expected to cause construction professionals and project owners to take more time to plan their projects and budgets for maximum efficiency, reported Ben van der Meer in the Sacramento Business Journal.
Higher demand for steel in the U.S. and abroad is being driven by continued recovery in the construction industry, according to the World Property Channel. Demand is expected to be highest in domestic real estate markets that have demonstrated high growth levels, such as Miami and New York. Steel demand in international markets such as Tokyo, Beijing, Shanghai, and Dubai is also having an effect on prices.
Increases in steel prices are a normal and expected result of the improvements in construction demand as the industry returns to a more typical cycle. Price increases of more than 20 percent in 2008 were reversed during the recession of 2009 as prices dropped more than 25 percent, Windle noted. Projected increases over the next three years are expected to reflect the ongoing recovery and improvement in the overall health of the construction industry in the United States.
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