Portland Cement Association predicts big cement use growth next year

The Portland Cement Association reports that an unusually wet spring and early summer dampened cement consumption for the first quarter of 2013 but did not put a wet blanket on the opportunity for strong growth in the construction sector in 2014 and beyond.

According to the September 2013 PCA forecast, cement consumption will increase a modest 4 percent in 2013 but will approach double-digit growth in 2014 and 2015, with 9.7 percent consumption increases in both years.

“Nearly two-thirds of the anticipated growth in 2013 cement consumption will be caused by gains in the residential construction market,” said Ed Sullivan, PCA chief economist, in the news release. “Home inventories are declining, signaling that it is time to start building, while the lingering effects of damaged credit due to foreclosure activity have created a robust apartment demand.”

The PCA asserts that just as a recession creates a pent-up demand for consumer products like cars, it also builds demand for construction. The trigger lies with a willingness to spend and reinvest in capital. According to the PCA’s scenario, consumer and business attitudes are expected to increasingly focus on the positive economic fundamentals rather than potentially adverse political uncertainty.

“Sentiment and confidence indices are extremely volatile. Business sentiment now stands at pre-recession levels,” Sullivan said. “Assuming Congress has learned its lesson from the fiscal cliff and will take a more rational approach with the upcoming debt limit discussions, political uncertainty and its adverse impact on the economy is expected to dissipate.”

Sullivan predicts an increase in local spending on public construction beginning in fiscal 2016, driving a prediction of an 11 percent consumption gain in that year.

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