©Bloomberg Commodities have always been cyclical, but already this year we have seen two distinct mini-cycles — down in January, recovering in February and March. Of course, fundamentals do not change that quickly, but sentiment certainly can. In particular, Chinese sentiment has turned around sharply — from the lowest point
Construction output in the UK is expected to increase by 1.2% in 2018 with growth primarily driven by infrastructure projects and private house building (Construction Products Association, 2017). The residential market has grown steadily over the years due to the increased demand for housing. In addition, public policy to support
Castle Building Services Organisation (Castle), one of the UK’s leading privately-owned building services design and installation contractors, has announced a recent contract win for its North East office on a new £9.8 million state-of-the-art healthcare facility in York. Working on behalf of principal contractor, Kier Construction, Castle has been
Stephen George + Partners, one of the UK’s leading architectural practices, has received planning permission for their £8million Metro Maintenance and Renewals Skills Centre in South Shields. This pivotal regeneration project, by Passenger Transport Executive Nexus, is a flagship development, promising to bring skills and new employment into the region.
©Bloomberg Commodities have always been cyclical, but already this year we have seen two distinct mini-cycles — down in January, recovering in February and March. Of course, fundamentals do not change that quickly, but sentiment certainly can. In particular, Chinese sentiment has turned around sharply — from the lowest point in the history of Macquarie’s China steel and copper surveys in January into positive territory. More On this topic IN The Commodities note So how should we view what has happened recently? Have fundamentals improved? Yes, from an extremely low base in December and January there has undoubtedly been a demand recovery. We would term what has happened as a “sub-trend to trend” move. For example global steel demand looks to have improved from around minus 6 per cent year on year to perhaps minus 2 per cent. At the same a time, a degree of confidence has returned helped by further loosening of the monetary policy from central banks. With it commodity order books have improved, helped also by a seasonal pick-up in demand. However, outlook for 2016 is not great and we would be cautious on hopes of further upside in prices as demand is not aggressive enough. Across the main metals and bulk commodities we cover, the majority will see negative year-on-year supply growth this year. Given global mining capital expenditure peaked in 2012 and adding the typical lag in the delivery of big projects, we always felt 2016 would be the year where a lack of new mines would be acutely felt. While this is helpful in bringing markets back towards balance with demand expected to be sub-trend, inventories high and many markets starting from an oversupplied situation, large stockpiles remain for most commodities. As of yet, there are few raw material constraints that have the potential to become inflationary in the near future with zinc the notable exception. The part the oil price has played in aiding the recent recovery should not be underestimated. Indeed, the correlation between oil and copper over the past six months has been strong. Oil does two things for other commodities; it drives down costs and also attracts (or dissuades) commodity investment. While it is too early to say that the oil rally has broken the wider deflationary cycle in mining, particularly as we believe the rally itself is not backed by fundamentals as of yet, it has helped to attract interest back towards commodities as a whole. Oil remains crucial to the wider commodity cycle, and will have to pull other commodities with it. In line with many market commentators, we feel recent price moves have been difficult to justify from a fundamental perspective. Given this, it is important to consider where we could all be wrong. One is Chinese construction. You need JavaScript active on your browser in order to see this video. Although we expect strong sales, 2016 will be a year of destocking. Developers have been tasked by the Chinese government with running down property inventory, particularly in smaller, provincial cities. This means that construction activity should be much lower than sales this year and thus a drag on commodity demand. Should indicators show a more sustained recovery in property investment or new start activity, following on from the surprisingly strong February data, demand expectations will improve and the recent price moves may be considered more sustainable. For us, this remains only a possibility given that it would involve a U-turn in the government approach to property activity, which in itself is one of the pillars of the much vaunted “supply-side reform” agenda. In summary, we do not think the overarching challenges in commodity markets are set to significantly diminish. While demand for commodity-containing goods may be good, and certainly better than 2015 owing to destocking, raw commodity demand will not. The Commodities Note is an online commentary on the industry from the Financial Times Colin Hamilton is the head of commodities research at Macquarie Copyright The Financial Times Limited 2016. You may share using our article tools. Please don’t cut articles from FT.com and redistribute by email or post to the web. Source link
Construction output in the UK is expected to increase by 1.2% in 2018 with growth primarily driven by infrastructure projects and private house building (Construction Products Association, 2017). The residential market has grown steadily over the years due to the increased demand for housing. In addition, public policy to support private housing initiatives has stimulated its growth. There is a strong demand for residence housing including flats and townhouses. 2018 will see different trends in building and design with technology playing a big role in constructing efficient and sustainable structures. Technology Advances Impact the Construction Industry Philip Hammond, the Chancellor of the Exchequer said that about 300,000 new homes must be built each year to address the housing shortage and improve accessibility. Last year, the government delivered 217,350 homes in England according to a BBC report. More could be done, however, to ease the housing crisis. Technology advancements can help reduce costs by improving housing construction. Customers can design their own unique home using virtual reality and 3D printing. The use of drones in mapping out and monitoring construction sites is also valuable in job inspections and providing updates to clients. Modular Construction Can Address Shortage of Housing The shortage of affordable housing in the UK is a very hot issue. Modular construction which involves assembly of a structure off site and then moving it to the desired location, can get the job done 65x faster according to Westchester Modular reports. Build times are reduced improving efficiency dramatically. Remote assembly of houses are not affected by adverse weather conditions and strict quality control ensures that manufacturing is carried out according to specifications. Modular construction reduces overhead costs and times making it affordable. For instance, building apartments in blocks with modern amenities will become cost-effective with savings passed on to customers seeking inexpensive flats. Demand for Green Housing Increases According to the Committee on Climate Change (CCC), 18% of UK carbon emissions come from buildings, mostly houses. In 2015, the plan of the Government to adhere to ‘zero carbon’ new homes from 2016 onwards was abandoned. In its place, the ‘2050-ready’ new homes policy was introduced under the Clean Growth Plan. This means that new homes must have minimal use of energy and lower carbon emissions. High insulation, low water demand and instant connection to renewable sources for energy are the highlights of these types of homes. Potential homeowners are going to benefit from green houses that are comfortable and cheaper to maintain. It is now up to the Government to support and implement the policy. The overall outlook for the construction industry remains optimistic. Modular constructions enable production of homes that are cost-effective. Technology advancements contribute to efficient results whist green homes benefit homeowners with houses that are cheap to run and comfortable.
Castle Building Services Organisation (Castle), one of the UK’s leading privately-owned building services design and installation contractors, has announced a recent contract win for its North East office on a new £9.8 million state-of-the-art healthcare facility in York. Working on behalf of principal contractor, Kier Construction, Castle has been appointed to provide a full range of mechanical, electrical and plumbing services on a new seven-suite endoscopy facility for York Teaching Hospital NHS Trust Foundation under the NHS P21Framework. The facility will also include recovery areas, interview-discharge rooms, offices and a plant room as well as ancillary spaces. The two-storey endoscopy facility is currently being constructed on top of an existing physio therapy unit and adjacent to the neuro sciences and renal departments. For that reason, it is a logistically challenging scheme to deliver. While working on the project, Castle will face several challenges, not least those associated with working on a live hospital site. To overcome this, the contractor will work closely with the Trust, its stakeholders and Kier Construction’s site team to ensure minimum disruption to patients, clinical staff and visitors. Further to the general building services, the unit requires specialised services to support its clinical function including uninterruptible power supplies and isolated power supplies as well as medical gas installations. Castle is currently working at pre-construction stage and will commence on site in July. The schedule of works is expected to last approximately 40 weeks, with the contractor expected to handover in the second quarter of 2019. Speaking about this latest contract win, Castle’s commercial director, Andrew Dawson said: “I’m delighted to announce the news of our appointment to such a prestigious scheme for York Hospital. Our previous experience of working in a clinical environment will stand us in good stead on this project. “We will be working closely with Kier’s team and other project partners to ensure we achieve all our key milestones on the project to bring it in on time and budget, ready to serve the people of York and the surrounding areas who need the vital services provided by the Endoscopy Unit.” With demand for endoscopy services set to rise on the back of the expansion of the NHS Bowel screening programme, the new unit will give York Hospital the extra capacity to meet that demand. It will also enhance the design of the department and provide patients with an improved experience when attending appointments. Kier Construction’s Senior Project Manager, Andrew Clarkson, added: “We’re looking forward to delivering this scheme and we’ll be working closely with the Trust to carry out these works whilst ensuring the hospital can continue to operate effectively on a daily basis. This will ensure that everyone involved is working towards the same goals to bring the scheme to a successful conclusion.” Patrick Crowley, Chief Executive, York Teaching Hospital NHS Foundation Trust said: “This is the biggest capital investment for many years and will allow the Trust to provide clinical services to a growing number of patients needing endoscopy. “This is an exciting development for the Trust and it will transform our service into a centre of excellence for endoscopy, providing an enhanced high quality care to our patients.”
Stephen George + Partners, one of the UK’s leading architectural practices, has received planning permission for their £8million Metro Maintenance and Renewals Skills Centre in South Shields. This pivotal regeneration project, by Passenger Transport Executive Nexus, is a flagship development, promising to bring skills and new employment into the region. Working with contractor Galliford Try Infrastructure, SGP developed a 33,500 sq ft single building option to accommodate a training centre and light maintenance facility, meeting the client’s budget whilst maintaining the facilities’ operational requirements. Architecturally the single building allows the development to be unified, with the training centre wrapping around the light maintenance area. Vertically stacking the accommodation allowed reception and break-out spaces to overlook the main entrance and kept classroom, meeting and engineering activities clearly split between floors. “This is a key milestone, enabling the team to now focus on the construction stage of the Metro Skills and Renewals Centre”, explains Alistair Branch, Director at Stephen George + Partners. “SGP is pleased that with this decision and their continued support, Nexus and Galliford Try will realise the delivery of a facility that will maintain the future of the Metro fleet and train the drivers and engineers of tomorrow.“ The Metro Maintenance and Renewals Skills Centre will provide training for more than 1,000 people working on the Metro, including contractors involved in the £350m modernisation of the urban rail system used by 40 million passengers a year. The Centre will contain classrooms, meeting rooms, offices, staff room, canteen and changing facilities, an enclosed light maintenance area including train inspection pits, a platform and mock station. An external training track facility will be built to the west of the building. Construction work is planned to commence late spring.
