Portland Cement Association Adverse economic and credit conditions hurt industry

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, according to the Portland Cement Association, leading the group to again adjust its cement consumption forecast.

The latest PCA forecast of cement, concrete and construction predicts a 12.8 percent decline in cement consumption in 2008, followed by 11.9 percent and 2.1 percent 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.

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

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


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