Steel’s performance stays high in low inflation age
News that inflation fell to zero in February for the first time since records began will have come as a pleasant surprise to many, especially those who grew up against a background of runaway inflation driven economic crisis.
Construction estimators however will quickly move to warn their marketing departments and their company’s clients that these headline figures bear no resemblance to what is happening to prices in our industry. Those headlines relate to the Consumer Prices Index, which means prices at the supermarket tills are, on average, only at the level of a year ago. Prices for all major construction materials are not behaving anything like that.
Clear warnings about this can be seen in the Gardiner & Theobald cost analysis that we carry a report on in this month’s issue, and which has also been reported on widely in the construction press. The G&T analysis shows that steel retains the competitive cost advantage over alternative framing solutions that it has enjoyed for over 30 years.
This advantage was maintained when prices were rising in the pre credit crisis boom years, was enjoyed by clients during the recession and persists into the current recovery. Steel has proven to be the cost-competitive solution whatever the economic background and whatever is happening to general prices or the prices of other construction materials.
Proof of the cost benefits achievable can be seen in the selection of steel for all of the case studies in this issue of NSC, along with a host of other advantages that come for no extra charge. We have a story about a rare 10-storey block in Hammersmith; as a speculatively built office-led regeneration scheme, cost along with speed of construction, flexibility and quality is key to the whole development.
With the economic recovery new commercial development is spreading to the regions, with projects like the one we report on in Leeds where re-engineering led to selection of cost-effective cellular beams, also delivering lighter foundations and programme advantages.
Ulster University is achieving its sustainability and carbon footprint targets alongside cost benefits with its new BREEAM ‘Excellent’ designed steel-framed campus. Costs are always crucial for the logistics industry and a new distribution centre at Stoke shows why steel commands a share of over 90% of this market.
The unique Japanese fan inspired moving bridge at Paddington Basin wasn’t only delivered within budget, but probably couldn’t even have been conceived in anything other than steel.
Lower consumer prices aren’t irrelevant for construction activity. Allied to upward pressure on wage rates they mean that the spending power of most people is rising, which will raise the level of economic activity, which in turn feeds through to demand for more projects like shops, cinemas and distribution centres. Whatever the level of demand, steel will remain the cost-effective solution.
Nick Barrett – Editor