PCA Predicts Continued Growth For Cement Through 2004

As the U.S. enters its 116th straight month of economic expansion, the Portland Cement Association projects continued gains in construction and cement use, according to William D. Toal, PCA’s Chief Economist. Portland cement consumption is forecast to rise 1.1% in 2000, cement consumption is expected to reach 114.3 million tons.

Toal attributes the cheery outlook to continued high construction levels. While residential building is expected to drop off slightly in the next two years, nonresidential construction is expected to hold steady, and public construction should increase, bolstered by passage of TEA-21 and AIR-21 (federal transportation and airport construction funding bills). Construction overall should dip slightly in 2001 and rebound in 2002.

The outlook for masonry cements is less optimistic. Tied closely to the residential construction market, masonry cement consumption is expected to slip by 1.5% this year, with another small decline in 2001 before recovery begins.

With demand for cement still rising, producers have scrambled to increase supply, both by increasing imports (to 29.3 million tons last year) and initiating expansion programs, including several “green field” plants, which could add up to 27 million tons of new capacity. As new capacity is added, imports are expected to drop to 23.5 million tons next year, with further declines to near 20 million tons by 2004.

A full copy of Toal’s “U.S. Construction and Cement Forecast Update” will be published in the next Monitor, a monthly newsletter published by PCA’s Economic Research department. For additional copies, contact Karen Arneson at PCA: 847.966.6200, ext 362; e-mail: [email protected].

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