Construction Market Trends

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III International Construction Issues and Concerns : Construction in the World Economy, Market Trends and Issues

Current Market Trends in Construction Industry | Chapter IV

I. CONSTRUCTION MATERIALS AND EQUIPMENT

1. Cement

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Table 1: Global cement companies 1-20 ranked by capacity. (Source: Annual reports of

respective companies and their websites and the Global Cement Directory 2013.)

The global cement market recovered slightly in 2011, with cement consumption

rising by around 3.7%. Despite cost inflation around the world and the global

economic crisis, the global economy grew by 3.8% in 2011 following an increase

of 5.2% in 2010 according to the IMF.

In China, the largest market, demand rose by 10% and in India, which accounts

for 7-8% of global cement consumption, consumption increased by a lower-

than-expected 6%. India reached a total capacity of 330Mt/yr in 2011.

In order, the global players that operate in many countries include Lafarge,

Holcim, HeidelbergCement, Cemex, Italcementi, Votoranitm, Buzzi and Vicat.

Each of these has a cement production capacity of more than 30Mt/yr. Lafarge

is top with 225Mt/yr.

In Europe, where many of the multinationals are based, France, Germany and

the UK registered volume increases due to favorable fourth quarter weather.

Austria remained flat while Greece and Spain experienced significant declines,

reflecting the macro-economic trends. Lafarge, top of the capacity rankings,

reported a 15% drop in sales in Spain, as lower volumes are needed due to a

reduction in civil works. The company's sales in Greece were down by 31%.

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Who controls cement distribution and trade?

The owners of the facilities involved in seaborne cement and clinker trade and

distribution (and especially the ones that own the receiving grinding plants and

bulk cement import terminals) are the ones in control. (Source: ICR Research

article Who control cement distribution and trade published on July 9, 2014)

So who owns these facilities?

As can be seen from Table 2, the top five multinationals own about 40 per cent

of the facilities involved in seaborne cement distribution and trade.

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Table 2: Overview of facilities of the top five multinationals involved in cement trade

and distribution, 2013. (Source: ICR Research article Who control cement distribution

and trade published on July 9, 2014)

Note: The statistic above represents the change in global cement prices between 2011

and 2016. In 2014, the global price of cement in is estimated to increase by around

percent, compared to the previous year. The table below represents the cement

consumption growth by region. (Source of the picture above:Global cement 2014

outlook by ICR Research, published on January 6, 2014)(Source of the table below:

Industry and National Sources, Global Cement Report, Morgan Stanley Research

estimates)

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Both companies (Holcim and Lafarge) combined have 43 cement plants, 36

grinding plants and 166 terminals involved in seaborne cement distribution and

trade. This total of 245 facilities represent19 per cent of the global total.(Source:

ICR Research article Who control cement distribution and trade published on

July 9, 2014)

About the source: ICR Research, the leading cement industry research group, publishes

regular sector analysis, news and reports in International Cement Review and on

CemNet.com.

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2. Wood

Table 3 shows that for the period under review, the U.S.was the major producer

of wood, followed by Japan, the UK, Germany, Italy, China, and Canada.

Table 4 shows that for the period 1996 to 2004, the U.S., Japan and the UK,

Germany and Italy were the dominant markets for imports of wood, with China

increasing its imports to the point where it became the top third importing

country in 2004.

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Table 3 and 4: Top 20 importing and exporting countries of wood.(Source: Trade

Information Brief, Wood and Wood Products / UNCTAD)

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Global Wood Trade (2010)

Global timber trade doubled over last decade

Greatest increase in secondary-processed products

Slowdown in 2008, 2009 with global economiccrisis

China became largest round wood importer andlargest secondary-processed

products exporter

Trade barriers distort markets

1. Export taxes, subsidies, tariff and non-tariff

2. Intentionally for national reasons

3. Consequences for partners forest sector

4.

(Source:Global Wood Markets Consuption, Production, and Trade by Ed Pepke,

UNECE/FAO)

3. Furniture (Tables, chairs, cabinets, etc.)

Global furniture production was valued at $450 billion in 2012.

China was the largest furniture-manufacturing country, followedby the US, Italy

and Germany.

Furniture production in emerging market countries has grown by 18% per year on

average since 2004, due to the strategic repositioning of manufacturers

andincreased consumption in emerging markets.

Furniture production within the UNECE region as a whole has been largely flat,

but with uneven results across countries and with some countries losing significant

market share (Italys declined by -10.5% from 2011 to 2012).

Globally the US was still the largest furniture importer in 2012, followed by

Germany and France.

(Source: Forest Products Annual Market Review 2012 to 2013 United Nations)

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4. Engineered Wood

5. Glulam continues to be the engineered wood product with the largest market

share in Europe.Germany, Italy, France and Austria are still the four European

countries with the largest consumption of glulam.

North American glulam production was 347,000 m3 in 2012, showing a 21.8%

increase since the markets collapse in 2009. Glulam production is forecast to

reach approximately 380,000 m 3 in 2013.

Laminated Veneer Lumber (LVL)production in 2012 in North America was 1.4

million m3, a20% increase over 2011. The trend is expected to continue

andproduction is forecast to reach 1.6 million m3 in 2013.

(Source: Forest Products Annual Market Review 2012 to 2013 United Nations)

6. Sand and Gravel The World Map of sand and gravel producers shows a list of the countries that

produce sand and gravel in large quantities. As the data in the map shows, the

United States is the largest producer of sand and gravel; in 2010, the country

produced 26,500 thousand metric tonnes of the materials. Italy ranks second with

an annual production of over 1.4 million metric tonnes. The third place is

occupied by Germany.

Other major countries producing sand and gravel include the United Kingdom,

Australia, France, Spain, Poland, Japan, Mexico, South Africa, Finland, Belgium,

Egypt, India, Iran, Norway, Austria, Chile, Czech Republic, Turkey, Canada,

Gambia, Bulgaria, Slovakia, South Korea, and Hungary.

Export of sand has been banned in countries such as China, Indonesia, Malaysia

and Cambodia due to environmental concerns

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Major Producers of Sand and Gravel in 2012 (Source: USGS Mineral Commodity

Summary 2012)

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7. Steel

Table 5 below shows the top steel producing companies in the world by 2013.(Source:

World Steel Association)

RANK IN 2013 COMPANY TONNAGE

1 ArcelorMittal (*) 96.1

2 Nippon Steel & Sumitomo Metal Corporation (*) 50.1

3 Hebei Steel Group (**) 45.8

4 Baosteel Group (*) 43.9

5 Wuhan Steel Group (*) 39.3

6 POSCO (*) 38.4

7 Shagang Group 35.1

8 Ansteel Group (*) 33.7

9 Shougang Group (*) 31.5

10 JFE (*) 31.2

11 Tata Steel Group (*) 25.3

12 Shandong Steel Group 22.8

13 U. S. Steel Corporation (*) 20.4

14 Nucor Corporation (*) 20.2

15 Tianjin Bohai Steel (1) 19.3

16 Gerdau (*) 19.0

17 Maanshan Steel 18.8

18 Hyundai Steel (*) 17.2

19 Benxi Steel 16.8

20 Evraz Group (*) 16.1

21 ThyssenKrupp (*) 15.9

22 Severstal (*) 15.7

23 NLMK (*) 15.5

24 Valin Group 15.0

25 Metinvest (*) 14.3

25 Jianlong Group 14.3

25 IMIDRO (*) 14.3

25 China Steel Corporation (*) 14.3

26 SAIL (*) 13.5

27 Fangda Steel (2) 13.2

28 Rizhao Steel 12.7

29 MMK (*) 11.9

30 JSW Steel Limited (*) 11.8

31 Jiuquan Steel 11.2

32 Baotou Steel 10.7

33 Anyang Steel 10.3

34 Zongheng Steel 10.2

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35 Taiyuan Steel 10.0

36 Jingye Steel 9.7

37 Techint Group (*) 9.0

38 Jinxi Steel 8.7

39 Xinyu Steel 8.5

39 Zenith Steel 8.5

40 Erdemir Group (*) 8.3

41 Sanming Steel 8.2

42 Guofeng Steel 8.1

43 Shaanxi Steel 8.0

43 voestalpine Group (*) 8.0

44 ISD Corporation 7.9

45 Citic Pacific 7.7

46 Riva ForniElettriciSpA (*) (3) 7.6

47 Kobe Steel Ltd. (*) 7.5

48 CELSA Group (*) 7.0

49 Usiminas (*) 6.9

50 Essar Steel (*) 6.1

50 Nanjing Steel 6.1

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Table 6: Major steel producing countries by year 2013.(Source: World Steel Association)

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Table 7&8: World Steel Exports by Product 2008 to 2013 and Major Importers and

Exporters of Steel in 2013. (Source: World Steel Association)

8. Plumbing Materials

Global demand for plumbing fixtures and fittings is forecast to advance 3.5

percent per annum through 2013 to more than $65 billion.

The Asia/Pacific region will register the most rapid growth, as residential and

nonresidential building construction spending in the area increases. Initiatives to

expand water and sanitation networks in regional countries will further aid

demand for plumbing products.

Anumber of Asian countries are expected to post large gains, including China,

India, Indonesia and Vietnam. China alone will accountfor over onehalf of all

new worldwide plumbing product demand between 2008 and 2013.

Growth in the developed parts of the world -- the US, Canada, Japan, Western

Europe and Australia -- will be not as strong as in most industrializing regions. As

the economies of these countries recover from the global financial crisis, building

construction spending will generally grow at a much slower pace than during

the 2003-2010 period, limiting demand for plumbing fixtures and fittings.

The Asia/Pacific region, Western Europe and North America are the leading

producers of plumbing fixtures and fittings, accounting for more than four fifths of

global output in 2008.

The largest manufacturers in these regions are China, the US, Japan, Germany,

Italy, France, Spain and the United Kingdom, each with 2008 industry shipments

of more than $1.5 billion.

The residential market for plumbing products is projected to be the fastest

growing end-use sector between 2008 and 2013.

Among developed countries, the US makes the largest contribution to residential

market growth.

The fixtures segment of the worldwide plumbing product market is expected to

grow at a somewhat faster pace than the fittingssegment during the 2008-2013

period. Rising per capita incomes in industrializing countries, especially among

the urban population will spur demand for more sophisticated fixtures.

(Source: World Plumbing Industry, published on March 2010)

(Source: World Plumbing: Industry Study with Forecasts for 2016 and 2021, published

September 2012 by the Freedonia Group)

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Global Players/Leading Companies in 2014

(Source: Global Plumbing Fittings and Fixtures Market Global Industry Analysts, May,

2014)

Asahi Eito Co., Ltd. (Japan)

CeraSanitaryware Ltd. (India)

Elkay Manufacturing Company (US)

Grohe AG (Germany)

Hindustan Sanitaryware& Industries Ltd.

(India)

Ideal Standard (UK)

Armitage Shanks (UK)

Jacuzzi Inc. (US)

Jaquar and Company Pvt. Ltd. (India)

Kohler Co. (US)

LIXIL Corporation (Japan)

American Standard Brands (US)

MAAX Batch Inc. (Canada)

Masco Corporation (US)

Moen Incorporated (US)

Roca Sanitario S.A (Spain)

Roca UK (UK)

Roca Bathroom Products Pvt Ltd (India)

Sanitec Corp. (Finland)

Spectrum Brands Incorporated (US)

Toto Ltd. (Japan)

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9. Electrical Materials

(Source: 2014 MDM Market Leaders: Top Distributors in 15 sectors)

10. Elevators and Escalators

Worldwide sales of elevators and moving stairways grew to about 86 billion U.S.

dollars in 2012.

Although some 50 percent of sales were generated in the EMEA region*, the

highest growth was experienced in the Asia-Pacific market. Here, sales of

elevators and escalators accounted for about 35 percent of the world total in

2012, up from little over ten percent in 2006.

The leading suppliers of elevators and escalators include the Finnish company

Kone, Switzerland-based Schindler Group, as well as Connecticut-

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headquartered Otis Elevator Company, a subsidiary of United Technologies

Corporation.

* The EMEA region is comprised of Europe, the Middle East and Africa.

(Source: Material handling: elevators & escalators - Statista Dossier July 2013)

Note: This statistic illustrates the worldwide market for elevators and escalators in 2012

and 2017. In 2012, global demand for elevator equipment and services came to

around 86 billion U.S. dollars.(Source: Statista 2014)

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Note:This statistic represents the leading companies worldwide in the area of elevators

and escalators in 2013, based on revenue. With 2013 revenue of around 9.5 billion U.S.

dollars, Finland's Kone was ranked third.(Source: Statista 2014)

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II. Construction Labor Cost 2011 (per country)

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(Source: International Construction Cost Survey 2012)

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