News | Sika AG (SIKA SW) | 17 Oct 2025

Data-center strength offsets EMEA buildings softness; US planning inflects, costs ease

Focus areas: Data centers, EMEA buildings, Roofing, Infrastructure, A&I

Data-center cycle remains exceptionally tight - Record-low vacancy, accelerating capex, and longer, power-limited build programs support Sika's DC roofing/waterproofing/flooring specification pipeline. CBRE (8 Sep), Dell'Oro (16 Sep)
US nonres planning re-accelerates; design remains soft - Dodge Momentum Index up 3.4% m/m in Sept, while ABI stays sub-50—pipeline brightening but near-term starts lumpy. Construction.com (7 Oct), AIA (24 Sep)
Roofing/new-build signals softer into year-end - ARMA Q2 shipments fell; calm storm season; single-family starts/permits weak. Roofing Contractor (24 Jul), Reuters (17 Sep), TIME (15 Oct)
EMEA: infra steadier, buildings weaker - Eurostat shows y/y improvement from a low base, but Sept construction PMI deteriorated; civil outperforms buildings. Eurostat (18 Sep), ConstructUK (6 Oct)
Materials and freight tilt to tailwind - Ocean rates down y/y; epoxy/acrylics easing; isocyanates mixed; asphalt indicators mixed by series. Drewry (16 Oct), IMARC Epoxy (Sep)

US nonres pipeline and activity

DMI up again in September; momentum inflecting - Dodge Momentum Index rose 3.4% m/m to 304.6 in Sept (commercial +4.7%; institutional +0.9%) after strong Aug/Jun gains, reversing a March dip; points to improving late-2025/2026 bid flow (esp. DCs/retail/healthcare). Construction.com (7 Oct), Construction.com (8 Sep)
Design work remains contractionary but bottoming - ABI at 47.2 in Aug (up from 46.2 in Jul), with new design contracts in decline for 18 months; suggests new starts stay selective near-term. AIA (24 Sep)
Headline spending treaded water mid-summer - July construction put-in-place −0.1% m/m and −2.8% y/y; private nonres −0.5% m/m, public +0.3% m/m; implies outgrowth via specs/infrastructure, not broad-based volume. US Census (2 Sep)
Backlog steady, DC work stretching calendars - ABC backlog index at 8.5 months in Sept (flat m/m), with firms tied to DCs at ~12 months; margins/staffing confidence up. ABC via GlobeNewswire (14 Oct)

Data-center cycle: still the standout driver

Hyperscaler capex and preleasing remain elevated - Global DC capex +43% y/y in Q2; North America vacancy 1.6% (record low), 74% of under-construction pre-leased; Northern Virginia pipeline +80% h/h. Supports Sika's roofing/waterproofing/flooring packages. Dell'Oro (16 Sep), CBRE (8 Sep)
Power constraints elongate schedules but add scope - "Bring-your-own-power" trend adds specialty envelopes/site works, sustaining project intensity and pricing. CBRE Brief (19 Aug), WSJ (16 Oct)
Alphabet raised 2025 capex by ~$10bn - To ~$85bn, citing a $106bn Cloud backlog and accelerated DC building—incremental specification opportunities into 2026+. CNBC (23 Jul)

US infrastructure execution pulse

IIJA outlays trending higher; ample highway ceiling - $319bn obligated and $177bn outlaid by 31-Aug; FY-25 FHWA obligation limit ~$61.3bn; supports bridge/road remediation demand (admixtures, repair/protection). USDOT IIJA (31 Aug), FHWA (31 Jan)
Airport grants add tailwinds to airside work - FAA announced further AIP tranches (e.g., $437m on Sept 24); supports runway/taxiway repairs (joint sealants, mortars). AAAE (24 Sep), USDOT (2025)

Roofing, residential, and contractor checks

Reroof volumes softer; close rates choppier - ARMA Q2 US shingles −4.3% y/y; low-slope bituminous weak; NRCA coalition shows more inquiries than signed contracts. Roofing Contractor (24 Jul), NRCA (29 Jul)
Low storm activity dampens replacement spikes - A notably quiet US hurricane season year-to-date lowers emergency reroof demand near-term. TIME (15 Oct)
New-build single-family cooled; remodeling stabilizing - Aug starts −7% m/m; permits −2.2% m/m; Harvard JCHS LIRA points to modest growth in 2026 (+~2–3%), aiding DIY/trade channels. Reuters (17 Sep), Woodworking Network (16 Oct)

EMEA construction: buildings weak, civil steadier

PMI deterioration offsets July y/y rebound - Eurozone Construction PMI fell to 46.0 in Sept (vs 46.7 Aug), with sharp commercial declines; Eurostat July output +3.2% y/y from a weak base. Civil/specialized works hold up better than buildings. ConstructUK (6 Oct), Eurostat (18 Sep)
Germany maintains infra execution focus - €1.1bn released end-July for Autobahn bridges/pavements; record-high investment totals signaled across plan horizon. BMF (31 Jul)
GCC awards slower; Saudi execution ongoing - 2025 awards down vs 2024; Saudi led Q3 ($28.1bn, 51% of GCC). Execution of prior megaprojects persists, but new awards cadence is slower. MEED/Gulfbase (13 Oct)

China/APAC: construction drag, auto offsets

Property and cement data still contractionary - Jan–Aug property investment −12.9% y/y; new starts −19.5%; Aug new-home prices −0.3% m/m; Aug cement output −6.2% y/y. Pricing terms likely remain deflationary in APAC construction. NBS (16 Sep), Reuters (15 Sep), Global Cement (16 Sep)
EV/A&I demand a strong counterweight - Sept global EV sales hit a record 2.1m (+26% y/y); China NEV retail ~1.3m; Tesla's China-made sales back to y/y growth. S&P Mobility nudged 2025 production up in China/NA/Europe, supporting A&I volumes. Reuters (14 Oct), CNEVPost (11 Oct), S&P Mobility (Sep)

Concrete/admixtures and US public markets

Cement shipments still below 2024 levels - US June −2% y/y; 1H‑2025 −5.3% y/y; suggests softer admixture pull-through vs last year, partially offset by public/civil. Global Cement (26 Sep)
UK merchants: volume clearing with mild deflation - Q2‑25 value +2.8% y/y on volume +4.0% with price −1.1%, suggesting improved sell-in cadence in price-sensitive categories. BMBI (5 Sep)

Input costs, freight, and raw materials

Ocean freight a modest tailwind vs early-2024 - Drewry WCI fell 17 straight weeks to early Oct before a small GRI uptick; Asia–US/Europe lanes remain well below peaks. Drewry (16 Oct), The Uncontained (9 Oct)
Epoxy/acrylic chains easing; MDI/TDI mixed - Epoxy and acrylic monomers softer q/q; MDI down in Europe but mixed elsewhere; TDI saw summer spikes on outages, with Wanhua's new TDI capacity adding supply into H2/H1-26. IMARC Epoxy (Sep), S&P Platts (25 Jul), Plastics Market (19 Aug)
Asphalt signals diverge by series - US PPI for asphalt roofing materials eased ~5% from Mar to Aug; NYSDOT binder postings trended up into Aug then softened in Sept—net stable with regional variance. YCharts PPI (Aug), NYSDOT (accessed 17 Oct)

Trade, regulatory, and FX watch

New US–China port-call fees add friction - Reciprocal fees took effect mid-Oct; while Sika is local-for-local, some project inputs/equipment may see timing/cost volatility. Reuters (14 Oct), Clyde & Co (Oct)
PFAS timeline lengthening reduces near-term disruption - ECHA updated the proposal; scientific evaluation targeted by end-2026 with SEAC draft-opinion consultation in spring 2026—more runway for reformulations/derogations. ECHA (20 Aug), ECHA (15 Sep)
EU microplastics: staged obligations clarified - Commission guidance outlines phased bans/labels into 2025/27/29; selective impact on coatings/adhesives. EC (1 Apr)
FX: firm CHF still a translation headwind - USD/CHF ~0.80; EUR/CHF ~0.93; CHF stronger y/y, slightly weaker m/m, marginally easing Q4 headwind. TradingEconomics (14 Oct)

Lead indicators snapshot

Indicator (latest)	Level	Direction vs prior	Implication
Dodge Momentum Index (Sep)	304.6	Accelerating (Aug +7.5%)	2025–26 bid calendars improving Construction.com (7 Oct)
Architecture Billings Index (Aug)	47.2	Slight improvement	Near-term starts remain selective AIA (24 Sep)
US Put-in-Place (Jul)	−0.1% m/m, −2.8% y/y	Decelerated vs spring	Volume flat; spec/infrastructure lead US Census (2 Sep)
Eurozone Construction PMI (Sep)	46.0	Deteriorating	EMEA building softness persists ConstructUK (6 Oct)
DC vacancy (H1-25)	1.6%	New low	Supports sustained pricing/specs CBRE (8 Sep)

Costs and logistics: consensus tilt

Input	Recent trend	Direction vs Q2	Read-through
Ocean freight (WCI)	~US$1,687/FEU mid-Oct	Lower y/y; modest GRI blip	Delivered COGS tailwind Drewry (16 Oct)
Epoxy resins	Europe −8.6% q/q (Sep)	Easing	Adhesive/coating margin support IMARC (Sep)
Acrylic monomers	Weak demand, soft prices	Easing	Supports water-based systems S&P (25 Jul)
MDI/TDI	Mixed; TDI spiked on outages	Volatile	Watch episodic squeeze risk Plastics Market (19 Aug)
Asphalt (PPI vs binder)	PPI −5% from Mar; binder up to Aug	Mixed	Net stable; regional variance YCharts (Aug), NYSDOT (17 Oct)

Net read-through for the next couple of quarters

Volume mix - Americas steady with visible support from data centers/airports and public works; EMEA buildings remain a drag while civil/repair steadier; China construction deflation persists but A&I benefits from EV-led production strength.
Pricing/margins - Material-cost/freight backdrop is incrementally favorable ex-isocyanate noise; contractors' bid confidence likely improves on stable-to-easing inputs. Sika's spec-driven positions in DC/infra should help defend mix.
Execution watch-outs - Port-fee/trade headlines may shift lead times on imported project kits; EMEA building PMI slide argues for conservative EMEA volumes near term; US reroof replacement lacks storm catalysts.

Uncertainty / Limitations: Some series are lagged (e.g., US spend July), and regional asphalt indicators diverge. Isocyanate (TDI) volatility may be transient; DC timing remains power-grid dependent.

Primer included 30 news items in this report of total 37 items available from its research.

This content is provided for general information only. It is not investment research and does not constitute advice, a recommendation, or a solicitation to trade. Primer can make mistakes - please verify independently.

Driven by AI, built by analysts.