Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding Fastmarkets AMM subscriptions. Please ensure you have their consent before giving us their details.

Are you sure it’s low cost?

Feb 17, 2017 | 03:40 PM | Thomas C. Graham

Tags  Thomas Graham, construction, steel, concrete reinforcing bars, business, building

Although we have seen improvements within the steel product family, we have not yet succeeded in displacing reinforced concrete in building.

I am watching daily progress in the construction of a mid-rise apartment building located near me, and I am wondering how the design and construction of such a building in reinforced concrete has so far survived without change for the past 100 years. This is still a very primitive process. Ready mix concrete trucks lumber in and out—long flatbed trucks deliver bundles of reinforcing bars. These bundles must be cut open, and the bars are then handled and placed individually in the proper location. Spacers are required so they do not move when the concrete is poured around them. A veritable on-site carpenter shop is required to fabricate the forms that contain the concrete—and the temporary wooden support structures that support those forms. This practice has not changed since the nineteenth century. (Well, the ready-mix trucks have grown from three to ten cubic yards!) Is this really the optimal way to build such a building in 2017?

If this question is addressed to the Owner/Architect/Contractor, the answer will predictably be, “This is the low-cost solution.” I discount the opinion of the Owner on the question of cost, as he has no readily available way to test the validity of the cost question; and this is what the architect and contractor are telling him. I discount the opinion of the architect, as this is not an area where he professes personal independent expertise. Now we are in the hands of the contractor, whose opinion on cost should carry some weight. However, in the real world, contractors develop expertise, equipment, and a work force that identify with either concrete or steel construction. So, an unholy alliance of the owner, the architect, and the contractor committed the design of the building to reinforced concrete—because “that’s the way we do it”—not because they know it is low cost. It is not practical to ask for competitive bidding on alternate building designs, which would bring some level of objectivity to the cost question, because there is a substantial cost involved in the preparation of alternate designs and alternate bids. So, the owner unknowingly really chooses the material for the building when he chooses the architect who chooses the contractor who is practiced and comfortable working in concrete.

There are some instances where reinforced concrete is not even considered in the design. Have you ever seen a high rise building in Manhattan designed in reinforced concrete? If you asked that Owner why he used steel, he would also say “costs.” He would be unable to prove it, but speed of construction (early revenue), minimal disruption to neighbors and traffic, would loom large in the owner’s calculation.

Self driving cars, killer drones controlled from another continent, smart phones that transformed the camera industry and other gee-whiz developments are encroaching on long established industries and consumer preferences. Although we have seen major process and product improvements within the steel product family, we have not yet succeeded in displacing reinforced concrete in much of the building industry. We may need a transfusion of sales executives from Silicon Valley, as this is certainly a formidable selling job that promises major rewards.

Thomas C. Graham is a founding member of T.C. Graham Associates. He is a former chairman and chief executive officer of AK Steel Corp., president and chief executive officer of Armco Steel Co. LP, chairman and chief executive officer of Washington Steel Co., president of the U.S. Steel Group of USX Corp. and president and chief executive officer of Jones & Laughlin Steel Co. His column appears monthly. He invites readers’ comments and can be contacted at


Latest Pricing Trends Year Over Year