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Steel output grows despite price rises

MATERIALS - Output at a 15-year high of 1.3 million tonnes despite steel section price increase

STEEL contractors will record their highest work output for 15 years in 2004 despite the escalating price of steel sections.

They erected more than 1.3 million tonnes of steel this year, the sector's highest volumes since 1989, according to the British Constructional Steelwork Association.

That figure climbs to approximately 2 million tonnes when other applications of steel, such as cladding and roof purlins, are included, the association's director general, Dr Derek Tordoff claimed.

The sector has seen the price of steel sections more than double over the past 12 months but, even though contractors have been unable to absorb those rises, clients have continued specifying steel and actually increased specification by 8 per cent on last year's figures.

Dr Tordoff said: 'There has been a dramatic increase in the volume of steel erected over the past 12 months.We estimate the final figure to be 1.3 million tonnes and, if you add on the number of steel cladding systems that have been specified, that figure creeps closer to the 2 million tonne mark.'

The steel sector saw dramatic increases in output during the 1980s, peaking at 1.4 million tonnes in 1989. Those figures dropped during the early 1990s following the downturn in fortunes for the construction industry. By the late 1990s the figure had levelled out at 1.1 million tonnes per year and has stayed there for the past three years.

Dr Tordoff said the increased demand had arisen because of the sector's expansion into areas other than the traditional steel framed commercial sector.

He said: 'There have been perceived problems with the price of steel going up but this has not translated into problems on the ground.

'Constructional steel has been expanding into the public sector and we have also been growing our market share in multi-storey residential schemes.'

And he claimed that, with the commercial property and office sector expected to come back on line over the next two years and boost output, the record could be broken.

Fears that contractors' full order books were a result of panic buying before the next round of price increases have subsided and encouraging volumes of work are appearing in the New Year.

One Midlands-based contractor that had been worried said it had been surprised by the steady levels of work.

Traditionally the volume of rolled steel section and plate used in buildings, stadia and bridges is used to measure the market's size.