The first half of the year did not produce stellar results for the construction industry. Publicly funded construction increased 7.3 percent in March, which marked the first period of growth during 2015. Manufacturing construction showed significant advancement during this period rising 9.8 percent from the previous month. 

However, when calculated on a seasonally adjusted annualized rate, construction slipped 0.6 percent for the quarter.

During the second quarter, construction starts in April rose 10 percent, due to megaprojects totaling $9.3 billion. Extracting the megaprojects, construction was down approximately 3 percent. With that said, total construction starts for the second quarter jumped 24 percent over 2014. 

The basic raw materials for production consisting of seamless pipe, plate and rough forgings continue to show stability in both cost and availability. This trend is expected to remain unchanged. This holds true for both carbon steel and high yield welding fittings and forged steel flanges.   

Pricing for domestic carbon steel welding fittings and forged steel flanges will most likely remain unchanged. Due to the susceptibly of the construction markets to the effects of EPA regulation, Federal Reserve policy,  and the turmoil in the Middle East, it is important to monitor the markets on a regular basis.  

Third quarter outlook for the northeast was positive with almost $7 billion in projects set to kickoff led by growth activity in the Marcellus and Utica shale.

The Oil & Gas Production Industry stood to benefit from these projects with $471 million in projects expected to begin construction.

The Power Industry was a major contributor to third quarter construction with $3.4 billion set to begin contruction from July through September. There was $2.9 billion of these expenditures attributed to natural gas-fired facilities. Of the $2.9 million, $850 million were set for construction near the Marcellus and Utica plays. Maryland, Virginia, West Virginia and the Carolinas (U.S. Mid-Atlantic Market) were set for almost $6 billion in third quarter starts. Again, the construction starts are led by natural gas power and carbon fiber. 

The Power Industry construction contribution was approximately $1.5 billion in starts in the third quarter. There was $1 billion in construction set for kickoff in South Carolina for a carbon fibers plant; expected to produce 1,800 to 2,000 metric tons per day, with expansion plans to produce up to 3,600 metric tons per day.

In the southeast (Alabama, Georgia, Florida, Tennessee, Puerto Rico and the Virgin Islands) $5.5 billion was scheduled for third quarter startups, with Industrial Manufacturing Industry as the leading contributor with $1.6 billion in start ups. Alabama will see a sizable portion of the $1.6 billion with a $500 million project for Mercedes-Benz sport utility vehicle plant in Vance, Ala.

The Oil & Gas Industry was in third place with $604 million set to begin construction in the third quarter. Deep Gulf Energy Companies' $600 million subsea tie-back in the Gulf of Mexico's Kodiak Field represents the bulk of the spending.

The Alternative Fuels Industry spending scheduled for third quarter kickoff was $725 million, dominated by a $70 million / 36,000 metric tons per year fuel pellet production facility in Millen, Ga. In the midwest (Kansas, Minnesota, Missouri, Nebraska and the Dakotas) almost $6.5 billion was scheduled for third quarter construction starts.

Power was the leader with $2.28 billion in scheduled startups between July and September, mostly in wind-farm contruction in Nebraska.  The Oil & Gas Pipelines Industry provides a little more than $1 billion in project startups, with $450 million attributed to the 550 mile Grand Mesa Pipeline Project. The balance of startup projects are in the Pharmaceutical & Biotech Industry, and The Food & Beverage Industry, totaling $1.62 billion.

The southwest (Arkansas, Louisiana, Oklahoma and Texas) was set to see more than $23 billion in third quarter construction starts. The Oil & Gas Production Industry led the way with $6.43 million in southwestern projects. The Alternative Fuels Industry was set to see $4.77 billion in third quarter startups dominated by a $4.6 billion synthetic fuel plant in Sierra Blanca, Texas.

With almost $3.83 billion spent on scheduled construction startups, The Power Industry comes in third place in third quarter construction. This is influenced largely from increasing demand in the oil and gas related businesses along the Gulf Coast.

The Terminal Industry comes in fourth place with a little more than $2 billion in schedule startups. Half of the scheduled $2 billion is dominated by the $1 billion addition to the ECHO Crude Oil Terminal in Houston (Enterprise Products Partners LP's.) In the Rocky Mountains Region (Arizona, Colorado, Idaho, New Mexico, Nevada, Utah and Wyoming) almost $7 billion will be spent on projects that kicked off in the third quarter, with Mining & Metals Industry leading the way with $1.87 billion in total investment.

The Power Industry comes in second with $1.86 billion in projects expected to begin construction in July through September. Wind power will dominate the construction starts with a major project in Wyoming. The Oil & Gas Pipeline Industry will contribute approximately $700 million in new startups. One major project is the 550 mile (200,000 barrels per day) Saddlehorn crude-oil pipeline

Finally, the West Coast Region (Alaska, California, Hawaii, Oregon and Washington) was expected to see approximately $8.3 billion in third quarter startup projects. The Industrial Manufacturing sector had $4.24 billion in projects expected to begin construction in the third quarter. Transportation dominated the spending with $3 billion in project startups.

Solar Energy drove $1.81 billion out of $2.06 billion slated for third quarter startups. Pharmaceutical & Biotech will see $567 million, and The Alternative Fuels Industry was expected to see $372 million in biomass-to-liquids plant construction in Lake Oswego, Ore.

Despite the reduction in oil prices U.S. production has hit an all time high. Increases in spending in The Oil & Gas Industry is led by the need to get products to market. As evidenced herein the Pipeline Industry is preforming well. The Refining Industry for the most part are performing well in response to the lower cost of feed stock. 

Demand is increasing on a worldwide basis as consumption is up due to the lower cost of fuel, according to the The Wall Street Journal. The price for WTI is hovering at $60 BBL and Brent is hovering at $64/65 BBL. If worldwide demand continues the upward trend oil prices could escalate to a $68 to-75BBL for WTI and Brent.

Given the sluggish pace experienced during the first half of the year the PVF Industry has reason to look to end of 2015 optimistically, as new projects continue to emerge from the planning and engineering stage to the startup stage.