Cement market healthy

Although a slowdown of the U.S. economy is expected, experts predict cement consumption this year to reach 129.6 million tons, an increase of 2.3% compared to 2005 levels, extending a three-year period of continual growth. Additional growth is forecasted for 2007, with a 1.2% consumption increase.

The Portland Cement Association’s (PCA) spring forecast had projected a 3.5% growth rate in 2006.

“Higher interest rates, oil prices and inflation will slow consumer spending,” Edward Sullivan, PCA chief economist, said.

“These forces will result in a harsh decline in residential building and slow the recovery in nonresidential construction activity in 2006 and 2007.”

Sullivan also expects slower job growth to contribute to a more cautious approach to public spending.

Additionally, the PCA summer forecast reports that the tight market conditions seen during the past two years have been dramatically reduced. According to PCA’s most recent survey, only two states reported tight conditions—compared to 30 states in 2004 and 2005. Large gains in imports in the first half of 2006 contributed significantly to the easing of supply issues.