By Joel Scanlon
The volume of various types of construction going in a region determines the extent of structural steel fabricating activities and revenues of the area. The same is the case with Australia.
The recession of late 2008 threw hurdles in the path of the significant progress that the sector was making until then with increase in construction activities. Since then, with minimal construction growth, the sector remained weak with lesser growth. This growth was further hampered by a spurt in imports due to manufacturers from China and Indonesia supplying products at a lesser cost.
According to IBISWorld industry expert David Stephen, before the recession the industry was bolstered with considerable building activity especially in the non-housing sectors such as constructions of institutions and bridges and roads.
The recession made the availability of financing difficult. Stephen stated that this brought about a vast reduction in housing starts in 2008-09 which again saw a spurt during 2009-10 and then gradually settled into a reasonable level the following year. As a result of this decrease, demand for structural steel also dropped significantly, but was marginally sustained by moderate construction activities in the non-housing segments. With the improving conditions, the industry earnings are estimated to touch 7.76 billion dollars during 2011-12. Although local requirements would not be too consistent, there would be a general upward incline In the coming five years. The structural steel fabricating sector is expected to experience persistent growth, supported by an increase in construction jobs due to improving financial conditions. The constructions would be non-housing to a large extent. Decline in steel prices would help in securing higher profits for the participants in the industry.