Just as the construction industry finally began to recover, news of the recent SVB collapse left many in the industry feeling uneasy about the future. The collapse could have significant short-term ramifications, particularly in affordable housing markets. The long-term outlook for recovery from the collapse is also uncertain, as it may take time for the impact to fully manifest.
Despite these challenges, however, the construction industry's long-term prospects remain somewhat positive. Experts predict that construction investment will continue to increase steadily, especially in infrastructure.
Public works construction is expected to rise 18%, reaching a total of $225 billion, thanks to the Infrastructure Investment and Jobs Act. The overall industry is also predicted to rise 6.1% in 2023, reaching $1,419,192 U.S.
But the construction industry still faces numerous short-term challenges, including fears of a potential global recession and ongoing difficulties with labor shortages and sourcing materials outside of the U.S. Volatility is a constant concern, and having a solid steel buying strategy is crucial for navigating the ups and downs.
Iron Ore Prices Rise On Positive Demand
Recent construction news also reports rising iron ore prices, which could lead to increases in steel rebar prices as well.
China, the world's largest steel producer, has seen improved steel plant profitability and a positive demand forecast, leading to higher iron ore prices. Meanwhile, the Chinese government has implemented strict regulations on iron ore purchasing to prevent hoarding, which could place additional pressure on prices.
Overall, the construction industry faces both short-term challenges and long-term uncertainties. The SVB collapse is just the latest obstacle in a constantly evolving landscape. But with careful planning and a solid understanding of the market, construction professionals can weather the storm and emerge stronger on the other side.
By Michael Kern for Oilprice.com
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