The steel industry has suffered from weak pricing and low, uneven growth for seven long years.
But the outlook for next year looks better, at least for cold-formed steel products that are used in construction. Thompson Research Group CEO Kathryn Thompson projected growth in the high single digits in a forecast she did for the Steel Framing Industry Association, a trade group. 2015 should end up being the best year since before the Great Recession.
"The main economic indicators certainly point to better days ahead, but the improved outlook for cold-formed steel framing really began in 2014 when there was a significant change in the pricing trends," Thompson says. "Since 2009, every attempted price increase was followed by an equal or greater pricing decline. Pricing stabilized in 2014, and increased production volumes have established a platform for growth in 2015."
The steel industry's slow recovery after the Great Recession has been especially hampered by a lack of nonresidential construction, but that's finally been picking up, Thompson said. Developers are no longer pursuing as many retail projects as they did before the downturn, but now are building more call centers, warehouses, factories and apartments, meaning more demand for heavier grade steel.
"It's still probably 15 percent off what it had been," she said.
The monthly TRG Building Products Survey estimated demand for steel studs and other construction project should be up nearly 10 percent for the year.
New construction, especially on major infrastructure projects such as the Panama Canal expansion, should drive growth between 5 percent and 10 percent in 2015, Thompson said.
"While we don't see explosive growth in 2015, it should be a year when everyone finally has reason to believe that the recovery from the Great Recession is underway," Thompson said.
Imports have grabbed a greater market share, but most of the imported cold-formed steel product are used mainly in Southern California and the Seattle area, Steel Framing Industry Executive Director Larry Williams said. Domestic producers in the Midwest should still benefit from the increased demands.
"The prospects of real growth in 2015 presents to all those who manufacture, distribute and install steel framing with the best opportunity in nearly a decade to increase the use of our products," he said.