The Outlook for the Steel-Construction Market

By: Ray Chalmers

Monday, February 2, 2015

The outlook for structural-steel construction in North America reminds one of the advice of those leading economic thinkers, Led Zeppelin—“Good times, bad times, you know I’ve had my share.”

Indeed, the U.S. structural-steel industry supplied, fabricated and erected structural-steel framing for nearly

Material handling and multifunction processing are timesaving trends in structural steel fabrication. Photo courtesy FICEP.

Material handling and multifunction processing are timesaving trends in structural steel fabrication. Photo courtesy FICEP.

20,000 buildings and bridges in the 2006-2007 period. By comparison, for 2013 that number was down, in the neighborhood of 8000 buildings and bridges, according to research provided by the American Institute of Steel Construction (AISC), Chicago, IL.

Yet despite such a peak-to-valley ratio, demand remains strong. Structural steel is the leading structural-framing material for buildings in the United States, with a 49-percent market share for 2013 for nonresidential and multistory residential construction. The market share for the closest competing material—reinforced concrete—is only 30 percent, says AISC.

A Quickening Pace

Construction starts, on a square-footage basis, in the third quarter of 2014 were estimated to be 333 million sq. ft., compared to 270 million sq. ft. in the third quarter of 2013, a growth of 64 million sq. ft. That’s nice growth compared to the 40-million-sq. ft. increase experienced when comparing the third quarter of 2013 to the same period in 2012.

“The bottom line,” reports AISC vice president John Cross, “is that the pace of the construction recovery certainly is quickening. Perhaps the most important trend to recognize is the sequence of recovery in different construction segments. Conventional wisdom always has been that single-family housing leads the recovery of all other sectors (multifamily housing, commercial and industrial) in coming out of a recessionary period.” The lead-lag relationship between single-family and commercial construction has traditionally been pegged at two years. But is that the case in this recession?

The concept of intelligent automation involves balancing a shop’s natural ebb and flow with software that extracts all processing functions, eliminating bottlenecks before they occur.  Image courtesy FICEP.
The concept of intelligent automation involves balancing a shop’s natural ebb and flow with software that extracts all processing functions, eliminating bottlenecks before they occur. Image courtesy FICEP.
“The answer is no,” Cross answers. “It appears that in coming out of this recessionary period single-family residential construction did not lead and there is not a two-year lag between single-family recovery and nonresidential building recovery. The drivers coming out of this recession have been industrial activity and multifamily housing. Industrial construction did not dip as far as the other categories, declining only 21 percent, and is now running above the 2006 level. Multifamily housing did drop precipitously, by 80 percent, but has recovered a significant portion of that loss to be only 35 percent below 2006 levels. Both of these markets picked up sooner and stronger than either single-family housing (which remains down 50 percent) and nonresidential, which remains 42 percent below 2006 levels.”

Non-building structures also are significant consumers of fabricated structural steel. Approximately 38 percent of the demand for structural steel goes to open-air stadiums, processing and chemical plants, power plants, petroleum refineries and other buildings that do not have a roof, according to AISC. Nonstructural applications such as rack systems, marine applications, trailers, transportation and mobile homes comprise 23 percent of the overall demand for structural products.

In an environment where improving the aging U.S. infrastructure remains a live issue, bridges are seen as a special case, in that the majority of bridge structures are fabricated from plate steel rather than hot-rolled shapes. Plate steel is not considered in the AISC supply or demand calculations presented above. Hot-rolled shapes for bridges comprise 3 percent of the overall market for structural steel, and are included in the non-building structures referenced above.

Time, As Always, is Money

Given that each steel-fabrication assignment is unique, a typical fabrication project will require between 10 and 20 hr. of shop time per ton of fabricated steel. Following a determined sequence optimized for shop flow and project schedule, the appropriate structural-steel members are cut to proper length, and then fabricated—drilled, plasma cut or punched, etc. When required, the members are cleaned and coated with paint or galvanized. The fabricator then groups the pieces in the order in which they will be erected in the field and loads them for shipping to the project site.

Structural tube processing is showing signs of growth. Photo courtesy HGG Group.
Structural tube processing is showing signs of growth. Photo courtesy HGG Group.
Material costs, say AISC fabricator members, account for between 30 and 35 percent of the final cost of the fabricated and erected structural steel. Fabrication and erection costs for structural steel vary greatly based on the type of structure being constructed, number of pieces, local labor conditions and the complexity of the connections.

Fabricating technology that reduces processing cycles and cuts delivery times to the construction site become significant competitive advantages. This is true for traditional beam-and-column work, as well as for non-construction industries. So says Bill New, owner and president of New Industries, Morgan City, LA, a fabricator specializing in pressure vessels and underwater pipelines. In a nutshell, underwater pipeline installation means no bolted connections because of potential leaks. This requires a lot of plate.

For plate processing, New Industries relies heavily on a Model HSFDB-2500C from Peddinghuas (Bradley, IL), that performs drilling, plasma and oxyfuel cutting, scribing, countersinking, milling and tapping. Prior to adding the machine, all beveling was done manually, says New, “requiring two or three fitters to accomplish what’s done now on the machine. Now, more accurate bevels save considerable welding time.”

More News on the Technology Front

FICEP, a maker of multifunction plate- and beam-fabricating equipment, with U.S. headquarters in Forest City, MD, touts “intelligent automation” as a competitive advantage. Says company president Tom Boyer:

“We’re able to go into a 3D model and extract all the geometry and intersecting data and generate a CNC program for fabricating the part. Whether it’s a section, stiffener or base plate, we can cut, bevel and even scribe and mark so each part is oriented and mated correctly.”

The famous Millennium Wheel (or London Eye), a notable non-building example of structural tube fabrication. Photo courtesy HGG Group.
The famous Millennium Wheel (or London Eye), a notable non-building example of structural tube fabrication. Photo courtesy HGG Group.
Automation makes more intelligent use of manpower and has a substantial impact on shop efficiency by simulating processes prior to production. “Structural fabricators know each project creates a unique ebb and flow in the shop,” Boyer continues. “Combining simulation with a multifunction line means shops can better optimize sequences before each project hits the floor. Bottlenecks are eliminated before they occur.”

Use of structural-steel tube and pipe also is growing, suppliers say. Based on recent history, HGG (Weiringerwerf, The Netherlands), a supplier of tube-processing machinery, forecasts a growth of about 15 percent from the North American sector alone. HGG sees demand for round pipe growing steadily, as architects continue to design elaborate structures with pipes.

As an impressive example of its capabilities, take a look at the complex structure of tubes used to build the Millennium Wheel in London. HGG cut all of the tubes separately and shipped them to the fabricator to be welded together. Other examples of HGG’s work include Wembley Stadium in London and the famous birdcage stadium in Beijing, China.

Structural Welding

At construction sites around North America, and the rest of the world, welders erecting all of this fabricated structural steel are opting for lightweight, inverter-based arc-welding power sources— smaller than traditional transformer-based or engine-driven units. In fact, say Bruce Chantry and Matthew Albright of Lincoln Electric, Cleveland, OH, inverters have frequently been spotted in the field for some time, but until recently most could not stand up to harsh environments and heavy use. While these older units were small, portable and efficient, and delivered good arc response, their reliability couldn’t match that of traditional transformer or engine-driven workhorses. This forced contractors to choose between convenience and small size or ruggedness. Not anymore.

Plasma processing for bolt holes and other structural tasks. Photo courtesy Hypertherm.
Plasma processing for bolt holes and other structural tasks. Photo courtesy Hypertherm.
Innovations in design and technology have made portable, high-amperage multiprocess power sources more robust and ideal for use in extreme field environments. In fact, some of today’s inverters are designed for construction applications from the ground up, with the operator as well as potentially harsh environments in mind.

Some machines, rated at 650 A at 100-percent-duty cycle with a range of 10 to 815 A, weigh in at only 165 lb., compared to a traditional engine-driven model (similarly rated) that can weigh more than 700 lb. New inverters also have a much smaller footprint and offer faster arc response, smoother arc action and a more consistent bead appearance, say Chantry and Albright.

The latest inverters not only offer design features targeted to the construction market, but also provide data-collection capabilities through special weld-data-acquisition tools, which previously have been available only in factory environments. Increased availability of mobile technology has made tracking at the construction site possible, allowing for weld-performance monitoring onsite and post-project review back at the office.

That’s not to say engine-based welders and power sources have not kept pace. Consider the Auto-Speed technology developed by Miller Electric, Appleton, WI. This new feature for engine-driven welder-generators automatically adjusts the engine to run at lower speeds, depending on the total power needed. Traditional engine-driven welder generators will run at a full 3600 RPM for all applications. With this new technology, Miller officials say, engine speed briefly jumps to 3600 RPM, and then automatically lowers to match the task at hand. Certain loads, such as welding at relatively low amperages, allow for the machine to carry the function out at idle (2400 RPM). These machines also can run common worksite tools—grinders, chop saws, drills and lights—at idle speed.

Combining Automation and Cutting Efficiency

Robotics also has entered the structural-steel playing field. So says plasma-cutting technology supplier Hypertherm, Hanover, NH, which adds robotic automation to plasma-cutting centers for increased beam- and plate-processing efficiencies. One robotic-plasma beam-processing system can replace as many as seven individual fabricating machines, say Hypertherm officials, used for sawing, marking, coping, drilling, punching and shearing. This can significantly reduce the manufacturing-floor footprint and eliminate as much as 80 percent of the required material handling.

For example, consider the case of Norgate Metals, Quebec, Canada. Using Hypertherm plasma equipment on a robotic cutting machine, Norgate has turned what often is a manual process involving several steps into an automated process involving just one step. The robotic system cuts 3D structural-steel shapes such as beams, channels, and square and rectangular tubes as long as 60 ft. The robotic plasma system replaces several operations—drilling, sawing and punching. A Hypertherm torch quickly moves from thinner sections of the beam to thicker flanges, cutting AISC-approved bolt holes and making bevels in no time without operator intervention. FPN


For more information on the structural-steel fabricating technology described here, visit the following websites:


See also: Peddinghaus Corporation, Ficep Corporation, HGG Profiling B.V., Lincoln Electric Co., Miller Electric Mfg. Co., Hypertherm, Inc.

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