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When will beams rebound? The high vacancy rate in commercial buildings has stalled new construction, and along with it much of the demand for structural steel products, at least until 2004. (Market outlook: structurals)(Cover Story).

Article Excerpt
The picture is not a pretty one for structural steel in North America. With its major market--non-residential construction--hitting rock bottom, consumption of beams and other structural products is not expected to recover significantly until 2004 at the earliest.

Commercial construction has been in a significant downturn since early 2001, notes analyst Christopher Plummer, managing director of Metal Strategies Inc., West Chester, Pa. "Demand is not good this year, it wasn't good last year, and it isn't likely to be good next year," agrees analyst Charles Bradford of New York-based Bradford Research, who says capital spending must improve before the industry can recover.

Though structural steel has won a little market share from competing materials--mainly concrete--the overall non-residential construction pie shrunk to 1.5 billion square feet in 2002, from 1.95 billion square feet in 2000. While construction might increase this year to about 1.6 billion square feet, that will still be well below 2001's already depressed level of 1.77 billion square feet, says Jim Collins, vice president of sales and marketing for the plates and shapes group at Metals USA Inc., Houston.

John Anton, senior economist and director of the Global Insight Steel Service, Walton, Mass., predicts a similar scenario, with a modest rise in non-residential construction demand this year, followed by a significant pickup--about 15.5 percent--in 2004, largely due to pent-up demand. For the rest of the decade, he says, demand will continue to grow, but at a more modest rate.

The current weakness...

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