PCA revises cement forecast downward

Nov. 11, 2008

The weak economy and tight credit conditions, coupled with severe job losses and the resulting decline in state government revenues, will translate into significant weakness for the construction industry through 2010, leading the Portland Cement Association (PCA) to again adjust its cement consumption forecast.

The latest PCA forecast of cement, concrete and construction predicts a 12.8% decline in cement consumption in 2008, followed by 11.9% and 2.1% declines in 2009 and 2010, respectively.

The weak economy and tight credit conditions, coupled with severe job losses and the resulting decline in state government revenues, will translate into significant weakness for the construction industry through 2010, leading the Portland Cement Association (PCA) to again adjust its cement consumption forecast.

The latest PCA forecast of cement, concrete and construction predicts a 12.8% decline in cement consumption in 2008, followed by 11.9% and 2.1% declines in 2009 and 2010, respectively.

The PCA report cites the continued drop in residential starts and the erosion of the strong fundamentals supporting nonresidential construction as major factors leading to reduced cement consumption. The weak economy also has affected the public construction sector.

“Several economic factors are negatively influencing the construction industry,” Edward Sullivan, PCA chief economist, said. “High energy prices, the sub-prime crisis, the melt-down of our financial markets, inflation, job losses and tight lending standards are combining to create weak economic conditions and the emergence of huge state deficits. Public construction accounts for nearly half of all the total cement consumption in the U.S., and states in poor fiscal condition will need to cut back on this spending.”

PCA expects cement consumption in residential to decline 31.7% in 2008 and 16.9% in 2009, but a rebound of the market in the second half of 2010 will lead to a 12.1% increase in consumption in that year. Consumption in the nonresidential sector is expected to decline 22.2% in 2009 and the public sector will see 6.6% declines in 2009 and 2010.

“The nonresidential construction market typically takes 18 months from the onset of better economic conditions to rebound,” Sullivan said. “With weak consumer spending, this sector will be especially hit hard in retail construction.”

PCA predicts a recovery to begin in 2011 with a 10.3% increase compared to 2010 consumption and a return to near-record consumption levels by 2013.

Sponsored Recommendations

The Science Behind Sustainable Concrete Sealing Solutions

Extend the lifespan and durability of any concrete. PoreShield is a USDA BioPreferred product and is approved for residential, commercial, and industrial use. It works great above...

Powerful Concrete Protection For ANY Application

PoreShield protects concrete surfaces from water, deicing salts, oil and grease stains, and weather extremes. It's just as effective on major interstates as it is on backyard ...

Concrete Protection That’s Easy on the Environment and Tough to Beat

PoreShield's concrete penetration capabilities go just as deep as our American roots. PoreShield is a plant-based, eco-friendly alternative to solvent-based concrete sealers.

Proven Concrete Protection That’s Safe & Sustainable

Real-life DOT field tests and university researchers have found that PoreShieldTM lasts for 10+ years and extends the life of concrete.