This year started out with a bang—and not necessarily a good one—for those of us in the steel industry. After the Biden administration put the brakes on the Nippon Steel acquisition of U.S. Steel, and wildfires ravaged California, and uncertainties loomed about the scope and breadth of tariffs and immigration policies, there were concerns about both the short and long-term viability of our industry. However, in my discussions with SFIA members, there seems to be a relative calm: confidence and optimism for 2025 and beyond. Here are some of the reasons they cite, as well as some of my thoughts on the coming year.

The New Administration

Whether you love or hate Trump, there is a consensus that his policies have been, and will be, good for small businesses in the short term. Most of the SFIA members qualify as small businesses, and many of our corporate leaders are upbeat about opportunities for the next few years. The association is concerned about the burdens and costs that regulations are putting on construction and applaud efforts to reduce unnecessary regulations, while maintaining protections on American manufacturing, American workers, and the global environment.

Images courtesy of the Steel Framing Industry Association

The Housing Market is Pushing Potential Homeowners to Multi-family

North America is in dire need of housing: and this was true even before thousands of Americans lost their homes to fire, flood, and windstorms in 2024. The shortage of all types of housing is real, and the shortage of affordable housing is critical. Although steel is not a major player in the single-family residential market, steel framing does have a major role in mid-rise and multi-family. Contractors are currently working on affordable housing projects where steel framing is combined with other construction types: including lightweight noncombustible floor and roof sheathing, and even some composite load-bearing projects supporting cross-laminated timber floor slabs.

Unfortunately, interest rates will likely remain high through much of 2025, keeping single-family homes out of reach for many. The options of apartment and condo living are looking more appealing to young families, and steel framing can help bridge this gap.

Inflation Reduction Act Spending Will Likely Continue

Less than half of the IRA funding allocated for construction has been spent. Although the president has issued an executive order suspending all funding disbursements under the IRA, most of the infrastructure projects scheduled for IRA funding are still needed and will likely go forward. In many cases, these federal dollars will also leverage state, local, and private funding for ancillary projects that will keep construction on key areas of infrastructure going for years. Under the current EO, Federal agencies have 90 days to submit their reviews and spending recommendations to the Office of Management and Budget and the National Economic Council.

Images courtesy of the Steel Framing Industry Association

Sustainability Still Informs Buying Decisions.

Although sustainability and climate change initiatives have taken a backseat to other policies with the new federal administration, there are still many companies and municipalities that are treating climate change as an emergency situation and allocating dollars to cut carbon emissions and develop clean energy. Energy and environmental programs will continue to see funding, despite high interest rates and reduced federal subsidies.

When I initially wrote this article, I included the statement that development of electric vehicle, battery, and microchip manufacturing will continue to flourish for the next several years. Unfortunately, the market for EV and battery plants is facing major economic and regulatory headwinds, and their future has become more uncertain. That being said, there are still many other U.S.-based manufacturing projects underway and on track for completion in the next few years.

The Suitability of Steel Framing for Automated and Offsite Construction

Companies large and small are realizing that two ways to address construction quality and labor shortages, is offsite and automated construction. With automation, the consistency, dimensional stability, and reliability of the supply of steel framing make it ideal for both modular and panelized construction and fabrication. Many steel framing machine manufacturers and software developers have been using the advantages of steel framing for years in their automated and assisted design of buildings and homes. Using computer-aided manufacturing, programs can design buildings, then send the designs directly to roll-forming machines so they can “print” studs, joists, and trusses to exact length with pre-punched holes for fasteners and services. Although these systems have been around for decades, there is a new level of accuracy and complexity that is now available from the systems.

Office Transformation is Growing in Urban Environments

With a glut of unused office space in many city centers, many owners are converting all or part of their buildings to some form of multi-family residential. While there are some significant costs with many of the changes required in plumbing and air handling systems, the wall and ceiling construction is relatively straightforward: and solutions already exist for appropriate fire- and acoustic-rated assemblies for multi-family conversions. This trend toward adaptive reuse of buildings is gaining momentum in sustainable construction: partially because of reduced costs, and partially because of the substantially lower carbon footprint of these refurbished structures compared to new construction. This is happening with many other types of buildings: rather than demolition and rebuild, replace and remodel is becoming a more popular option. While this is not good news for concrete and structural steel, CFS still plays a major role in these building renovations and will continue to maintain market share as these renovations continue.

Data Centers are Still Booming

The construction of data centers uses quite a bit of cold-formed steel: not only in the partitions but in the ceiling and rack systems supporting wiring and cooling systems. The design live loads for data center ceilings are relatively high, requiring robust structural support using multiple forms of CFS. Data center construction will continue to grow over the next several years, and CFS will continue to be the most efficient way to fit out these structures.

The biggest problem still looming in all this is persistent inflation. As of this writing, inflation rates have begun to creep back up, and the chance of additional federal interest rate reductions are no longer a sure thing. With continued high mortgage rates, many construction projects remain on hold awaiting more favorable conditions for financing. Still, with the promise of both federal and state projects in the coming months and years, many in construction are still confident that 2025 will be good for their companies and backlog.