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Steel stays the competitive choice

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Tender prices fell to unsustainable levels during the post credit crisis and recession years, placing the entire supply chain under pressure. Demand has recovered from those lows, though it hasn’t reached the previous peak for structural steelwork, and there is still spare capacity in our sector.

There have recently been reports about some developers in London putting projects on the backburner because of rising tender prices and several are said to be revisiting their costings. This might easily backfire as the next move in tender prices could easily be upwards. Against a background of rising material costs, wage inflation and strong demand in other parts of the market, today’s tender prices could look cheap in a year or so, especially if a rebound in oil prices forces the cost of materials up.

One thing the construction supply chain would agree on is that margins have been too tight in recent years so if developers are looking for price cuts the message is don’t look for it in our margins.

For developers who decide to push on against whatever short-term headwinds there might be, there is at least some good news from the latest cost research by Gardiner & Theobald. The latest Steel Insight series article that appeared in Building magazine on 26 February shows that steel is maintaining the competitive edge that has brought it dominance in the key markets like multi-storey offices and single storey industrial buildings for so many years.

As can be seen from the project profiles in this – or any – month’s issue of NSC, steel is consistently the cost-effective choice for the widest range of types of building, delivering benefits to sustainability, to construction programmes and to flexibility; sometimes it is steel that makes buildings possible at all.

Construction prices might have been on a rising trend recently, but steel retains its competitive cost edge and there is nothing on the horizon likely to change that.

Nick Barrett – Editor

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