According to Office for National Statistics, construction is in decline but sales of construction's most basic ingredients are rising.
Construction News Mon May 11 2015
Latest quarterly survey of members of the Mineral Products Association (MPA) shows first quarter 2015 sales volumes increasing across the board. MPA’s data brings into question the accuracy of official government numbers that put construction output in decline. According to the Office for National Statistics (ONS), construction output shrank by 0.8% in Q1 2015. MPA's figures provide an indication that the ONS might have got it wrong.
Seasonally adjusted results, providing a consistent quarter by quarter comparison, indicated that crushed rock and sand and gravel sales volumes rose by 2.2% and 3.6% respectively compared to Q4 2014. Ready-mixed concrete and asphalt sales were 1.3% and 1.2% up.
Latest data for cement shows that annual sales grew by 7.8% in 2014. After an intervention by what is now the Competition & Markets Authority, cement sales figures are now collected only on an annual basis, not quarterly.
However, the latest quarterly volumes for asphalt, aggregates and concrete remain respectively 15%, 25% and 30% below the pre-recession peak.
MPA chief executive Nigel Jackson said: “Demand for our sector’s materials, which are critical to construction, has continued to grow in Q1 suggesting that construction activity remains buoyant. We believe that recent preliminary ONS construction data may be underestimating actual levels of activity and await later revisions to confirm the true picture. However, the official data do highlight that construction activity is essential to a continuing economic recovery and a new government must ensure that uncertainty is minimised to boost confidence to encourage sustained public and private investment in construction following the election.”
MPA sales volumes in Great Britain
% Change on previous period (seasonally adjusted)
Asphalt Ready-mixed
concrete* Crushed Rock Sand & Gravel Cement
2013 3.9% 11.5% 7.5% 7.8% 9.7%
2014 8.6% 3.1% 13.5% 7.2% 7.8%
2014 Q1 -2.6% -4.1% 3.8% -2.1% -
2014 Q2 3.4% 2.7% 2.8% -4.4% -
2014 Q3 3.1% 3.5% 2.7% 7.7% -
2014 Q4 5.2% 0.0% 3.1% 1.5% -
2015 Q1 1.2% 1.3% 2.2% 3.6% -
*RMC is the sum of sales from both fixed & site plants.
*Cement refers to all cementitious materials. Data available on a yearly basis only.
The figures give sales trends by volume of material sold for a consistent sample of Mineral Products Association members comprising the following approximate proportions of total GB markets.
• Crushed Rock aggregates – 80%
• Sand & Gravel aggregates – 80%
• Asphalt – 80%
• Ready-mixed concrete – 60%
• Cement – 85%
The city of Chicago has awarded Parsons Construction Group a contract to upgrade the airport transit system (ATS) at O'Hare International Airport.
The US$310m (£204m) contract is for Parsons to construct a 2,000-ft track extension to reach the consolidated rental car facility (CRCF) and for design and replacement work on the existing ATS system.
The contract is part of the US$782m CRCF project, which will consolidate all of the rental car companies into one facility, as well as offer new public parking for airport passengers.
Under the contract, the ATS maintenance and storage facility will also be expanded, and the existing 15-vehicle ATS fleet will be replaced with 36 new rail cars that feature automated vehicle control, traction power and communications improvements.
Parsons will manage construction of the project and provide design for the traction power, communications, and track work while performing systems integration and commissioning work for the entire project. The supplier of the ATS vehicles and the train control system is Bombardier.
Encouraging signs of further recovery in the roads sector have been noted by the Mineral Products Association. It reports increased sales of aggregates and asphalt during the first quarter of 2015 compared to the last three months of 2014.
Crushed rock sales are up 2.2%, sand and gravel sales are up 3.6% and asphalt sales are up 1.2%. But there are signs of a slowdown in the pace of growth over the last year, especially in terms of asphalt which had seen increased sales of 5.2% in quarter four of 2014, 3.1% in quarter three and 3.4% in quarter two.
And to put the latest growth figures into context sales volumes for asphalt remain 15% below their pre-recession peak and aggregate sales remain 25% down.
Mineral Products Association chief executive Nigel Jackson said: “Demand for our sector’s materials, which are critical to construction, has continued to grow in quarter one suggesting that construction activity remains buoyant.
“We believe that recent preliminary Office for National Statistics construction data may be underestimating actual levels of activity and await later revisions to confirm the true picture. However the official data does highlight that construction activity is essential to a continuing economic recovery,” he added.
“A new Government must ensure that uncertainty is minimized to boost confidence to encourage sustained public and private investment in construction following the election.”
Road surfacing company Toppesfield's chief executive Matthew Pryor said: “The MPA figures reflect a buoyancy in the market over the past six months, although looking ahead there remains a degree of apprehension and uncertainty due to the General Election.
"In particular the industry is keen to see if the budgets remain unaffected post-Election. Investment in construction and the road network are essential to the continuing economic recovery, and we expect that if there is a different Government it will not take an alternative view."
He added: “I am surprised to see that the increase in asphalt sales is up only by just over 1%. In the Midlands and the south we would expect growth to be in the region of 5%, which would suggest that in other areas it remains low."
The entire second floor of an end of terrace house under construction collapsed to first floor level in West Ealing on Monday afternoon.
Firefighters and the brigade’s Urban Search And Rescue crews were called to the scene to search the building for any casualties.
Station Manager Chris Frewin said: “The USAR team have rescued a man who was trapped and he is being treated by the London Ambulance Service. Another man has also been treated for minor injuries.”
Fire engines from Southall and Ealing fire stations and fire rescue units from Battersea and Croydon fire stations all attended the scene.
Germany’s construction sector continued to grow in April though the rise in output was slower than the previous month and civils work fell.
The seasonally adjusted Purchasing Managers’ Index (PMI) - which is based on a single question asking respondents to report on the actual monthly change in their total construction activity – fell from March’s 53.3 to 51.0 in April. This signaled that output growth in German construction firms was weaker. Where survey participants signaled higher construction activity, they partly attributed this to increased new orders and good weather.
Out of the three broad categories of construction activity, civil engineering was the worst performing sub-sector, with output falling since the previous month. The decline followed a marginal expansion in March.
Meanwhile, work on residential building projects rose for the seventh month running in April. However, the latest increase was much weaker than those seen in the previous two months.
Commercial activity also rose at a slower pace in April. The latest expansion was nevertheless the second-strongest in just over a year and above the long-run series average
Lafarge has signed an agreement with US start-up Solidia Technologies to commercialize a technology designed to reduce the environmental footprint of precast concrete.
The patented technology allows lower CO2 emissions in the cement production process and uses CO2 in precast concrete manufacturing. Lafarge claims that it reduces the carbon footprint of the end-to-end process by up to 70%.
Under the terms of the agreement, Lafarge will have the right to commercialise the technology worldwide. It will offer a complete system of sustainable cement and CO2-cured concrete in partnership with Solidia.
Commercial launch will first take place in some key markets in North America and in Europe for the manufacturing of concrete elements such as paving stones, roof tiles and concrete blocks.
Solidia has developed a new binder made from similar raw materials to Ordinary Portland Cement (OPC) and produced in a traditional rotary kiln. It is produced at lower temperatures and through a different chemical reaction that generates less CO2.
When used in the manufacture of precast concrete, Solidia Cement hardens through the addition and absorption of CO2 in a patented curing process that is said to reduce the overall carbon footprint by up to 70%.
Lafarge said that Solidia Concrete is higher performing and reaches full strength in less than 24 hours, compared to 28 days for precast concrete made using OPC.
Lafarge has collaborated with Solidia Technologies since 2013 to industrialise this technology. The two companies worked together to demonstrate the feasibility of commercial-scale production in a conventional cement plant. In April 2014, a joint group of Lafarge and Solidia scientists validated the reduced carbon footprint and commercial viability of Solidia cement during a full-scale trial at Lafarge's Whitehall cement plant in the USA. The cement produced has subsequently been used by a variety of precast customers in North America and Europe to further validate the curing technology and to produce blocks, pavers and roof tiles for commercial testing.
Zimbabwe’s authorities have awarded a US$1.9bn (£1.2bn) housing contract to China Civil Engineering Construction Corporation.
The Magamba 2015 housing project was awarded by the Ministry of Local Government, Public Works & National Housing.
The work will be carried out by subsidiary CRCC China-Africa Construction and will take place in phased construction contracts, timed according to the progress of securing all the financing needed for the project.
The European Commission has opened an anti-dumping investigation into Chinese imports of steel rebar.
The investigation will look at the flood of imports of high fatigue performance rebar, which is coming into the UK at below market prices.
Imports now account for half of the total steel used in construction and are undermining domestic steel manufacturing.
European trade body EUROFER triggered the Commission investigation warning the situation was “no longer sustainable”.
UK Steel, the body representing manufacturers, said it hoped the move would see a step-change for European procurement practices, reintroducing a level playing field for suppliers across the UK and Europe.
Gareth Stace, Director of UK Steel, said: “UK steel members are encouraged by the Commission’s action to investigate our complaint that rebar from China is being dumped on the EU market, at below fair market prices.”
“Over the last three years we have seen import penetration rise from near zero to around 50% of the UK market.
“I very much hope that this investigation can be concluded as quickly as possible, to ensure that UK rebar producers can once again operate in a free and fair global marketplace.”
The organisation, which represents every steel producing company in the UK and many steel processing companies, launched the Charter for Sustainable British Steel last year to combat the excess of what they see as sub-standard Chinese rebar imports.
Balfour Beatty and Morgan Sindall and a range of local authorities have already signed-up to the Charter, which promotes the use of sustainable, BES 6001 accredited rebar. The Charter has also been formally welcomed by the UK Government and the Welsh Government.
Softening Chinese steel demand has exposed vast over-capacities, estimated by the OECD at around 400 million tonnes, fueled by state control and financial assistance.
In particular, the recent lifting of the boron-alloy VAT export rebate has created a trade loophole by replacing boron with other alloys such as chrome.
According to EUROFER the Chinese government cut electricity prices recently to support Chinese steel producers facing an over-supplied, depressed domestic market.
The steel producer body claims that because China does not effectively address its excess steel capacities and allows producers to operate under market conditions, its excess production is destabilizing the global steel industry.
“Like most of its steel trade partners, the EU is acting against the unfair Chinese imports” said Axel Eggert, director of EUROFER.
“When trade remedies are justified, they should be imposed in as timely and effective a manner as possible – just like other trade partners do”.
A string of railway and Crossrail projects and more selective bidding has delivered strong profit growth at steelwork specialist Bourne Group.
The Poole-based contractor has bounced back after several lean years with pre-tax profits jumping 41% to £1.3m on turnover ahead £6m to £48m.
During its 2014 financial year, Bourne completed projects including the new Reading Station, extension of the National Theatre in London, the new £13m Bristol Parkway multi-storey car park for First Great Western and new offices for BSkyB. It is also working for Crossrail on several station headhouse projects.
Also Bourne has just become the only steelwork business to be awarded a Network Rail principal contractor licence allowing it to carry out rail projects and work trackside on the network.
Chief executive Steve Govier said: “During the second half of 2014, the long awaited recovery in the UK construction sector began to take hold, buoyed by strong growth in the private residential sector but with strong demand experienced in the commercial and infrastructure sectors and a general upturn in the wider UK economy.
He said several competitors has ceased trading over the last six years, reducing capacity in the steelwork industry significantly.
“As demand increased, it quickly outstripped capacity and the company found itself able to be more selective in the choice of projects undertaken, with a general improvement in trading conditions, especially in the fourth quarter of 2014.”
He added: “All of the market indicators are showing that the construction sector is now in a period of sustained growth. Aside from the potential impact of the looming general election and other global factors, there is every reason to believe that this will continue for the foreseeable future.”
Bourne has already secured 70% of its planned work and had net funds of £10.4m at the October end of its financial year.
The average number of staff employed during the period grew to 176 from 150 as orders picked up.
During the year former chairman David Sands announced his retirement after 30 years at Bourne. It also opened new offices in Bristol and Ringwood as well as redeveloping its former offices at Ferguson House to residential units.
Three teams have been shortlisted for the design and construction of a AU$2bn (£1.03bn) rail project to open up the eastern suburbs of Perth in Western Australia.
The three are:
• JHL JV - John Holland and Leighton Contractors
• SI-NRW JV - Salini Impregilo and NRW
• Forrestfield Connect – Acciona Infrastructure, BAM International and Ferrovial Agroman.
Each consortium will now be issued with a request for proposals to develop fully costed schemes for the Forrestfield-Airport Link project.
Transport minister Dean Nalder said that the Public Transport Authority (PTA) evaluated five proposals. “The level of interest in designing and constructing this transformational rail line to Perth’s foothills via the Perth Airport has been high,” he said. “The five proposals that were submitted were from leading national and international contractors, but only a maximum of three respondents can progress to the next stage.”
The 8.5km rail extension branches off the Midland Line, just east of Bayswater Station. It will feature three stations, Airport West, Consolidated Airport and Forrestfield.
A contract will be awarded to the successful bidder in mid-2016 with detailed design to begin soon after and construction starting in late 2016. The first train will operate along the line in 2020.
Congestion busting highway improvements near Crewe have reached a crucial stage, with work to begin soon to excavate earth from beneath a new rail bridge (pictured) to allow a new road to pass underneath.
The £27M Crewe Green Link Road South project is expected to alleviate congestion by creating an alternative bypass for Crewe and improving access to the A500 and M6.
The 1.1km dual carriageway will link the Weston Gate roundabout on the A5020 and the A500 Hough–Shavington Bypass. Work is being carried out by main contractor Morgan Sindall on behalf of Cheshire East Council.
Over Easter the 2000t railway bridge was installed on the line between Crewe and Derby beneath which the new road will pass. The bridge is 30m long and its installation "was meticulously planned to coincide with a weekend rail possession,” according to Morgan Sindall highways director Gary Crisp.
During April sheet piles have been installed to create a large cofferdam to allow earth to be excavated from beneath the bridge. Work on the road scheme is expected to complete at the end of the year.
Cheshire East Council executive director of economic growth and prosperity Caroline Simpson said: “The Council is pleased that work is progressing well on the road. Once complete it will allow traffic to move around Crewe rather than directly through the town centre and Nantwich Road.”
The new road is also expected to help create access to 12,500 jobs over the next 20 years, including at the Basford East regional and strategic development site which the project passes through.