According to IBISWorld, steel prices are forecast to increase at an annualized rate of 2.2% over the next three years because of growing demand from the recovering construction industry and from high-growth real estate markets around the world like Shanghai, Beijing, Tokyo, Dubai, Abu Dhabi, New York and Miami. This increased demand is now putting pressure on pricing, leading to a rise in steel-related construction products.
As a primary input for many construction and industrial equipment products, steel exhibited a significant degree of price volatility in the midst of the Great Recession. As the construction and industrial industries tanked, demand for steel followed suit, with prices plunging 25.1% in 2009. Steel prices bounced back strongly the following two years; however, the recovery was short lived. As a result, IBISWorld expects steel prices to decline overall at an annualized rate of 3.8% from 2011 to 2014.
Lower steel prices have helped curb price growth for products used in building and industrial applications. However, with steel prices forecast to increase over the next three years and construction and industrial activity projected to remain strong, buyers will encounter higher prices for steel-based products heading into 2017.
Some of the top five key products IBISWorld has identified that will likely undergo accelerated price growth over the next three years due to rising steel prices include: security wire fencing, nails, elevators, building demolition machinery and equipment, and forklifts.