Capital expenditures are long-term assets that are relevant to a company’s success. A steel building would be considered a capital asset because it has a useful life of more than a year and is used for a variety of business-related goals. Qualifying as a capital expenditure allows the building owner to reap rewarding tax benefits like those found in section 179.
Buying in the Spring versus Winter
As a supplier of steel buildings, we see a substantial increase in demand in the spring and throughout the summer. That’s when construction is most convenient because of warmer temperatures, especially for projects taking place in colder climates. The problem with waiting to buy your building until the first quarter of the year is that delivery timeframes can double. That can be the difference between starting your project in April or June.
Unpredictable Steel Prices
The price of a steel building is dictated, in part, by the global steel economy, which has shown considerable volatility in the wake of new tariffs and an ongoing trade war. For example, the price of steel dropped 10% during 2019, which was good news for buyers, but the future of steel prices remains uncertain. Forecasts for this year are a mixed bag as the status of trade deals that could stabilize the market are still up in the air.
Even if the market were to continue its downturn, lowering prices even further for buyers, it’s entirely possible that several countries could respond with “stimulus measures that typically involve infrastructure development and greater production of steel”, according to a Bloomberg report.
As the steel market remains in limbo, seek advice from your Project Consultant and General Steel on where prices are currently and seem to be heading in the future.
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