Ernst & Young has quantified the effect of lower oil prices on exploration and non-residential construction starts soared in May.
Deepwater oil projects and complex gas facilities worth around $200 billion have been canceled or put on hold worldwide in recent months due to the sharp drop in oil prices over the past year, consultancy Ernst & Young said on Tuesday.
Further project cuts and delays are likely as the industry braces for an extended period of lower oil prices as a result of a supply glut. This has affected the previously strong sales of metal products such as oil country tubular goods (OCTG).
Non-Residential Construction Up
Non-residential construction starts soared by 30.3% in May after taking a 5.6% hit a month earlier, according to data provider CMD.
Non-residential construction starts were 2% higher for the first five months of 2015 than they were during those months last year. The value of non-residential construction starts from January to May was $119.5 billion, the report said. Standout projects that started in May include Tesla Motors’ $2 billion battery gigafactory in Nevada and $1.1 billion Microsoft data center in Iowa.