Cement consumption forecast downgraded

Although the United States economy is not technically in a recession, an increasing unemployment rate, higher inflation, and negative consumer sentiment will combine to have lingering negative effects on cement consumption and the construction industry, according to the latest Portland Cement Association forecast of cement, concrete, and construction.

The PCA forecast predicts a 12 percent decline in cement consumption in 2008, followed by another 6 percent drop in 2009.

Real construction activity is expected to decline 9 percent in 2008, and another 7 percent in 2009, stated PCA chief economist Edward Sullivan in a press release. The combination of high home inventories, weak economywide demand conditions, and poor state budget conditions is expected to hit all sectors of construction — residential, nonresidential, and public.

Although PCA had expected a downturn in nonresidential construction to occur in the third quarter of 2008, this sector is working on a backlog of projects already under contract and should be steady until closer to the end of the year.

PCA predicts a recovery to begin in 2010, but a more modest one than previously forecasted. Total cement consumption in 2010 is expected to increase 2.7 percent from 2009 levels.


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