Revised Pca Forecast Sees No Significant Rebound Until 2013
- Written by CP Staff
Lagging federal and state investment in transportation construction will constrain recovery in cement consumption and concrete output from the severely depressed levels of 2009, when shipments dropped nearly 45 percent against 2005-06 peaks. In its most recent economic forecast, Portland Cement Association projects cement-consumption increases from last year's trough: 2010, 2.4 percent; 2011, 6.7 percent; 2012, 8.4 percent; and, 2013, 18.8 percent.
Delays in an extension of SAFETEA-LU reduced highway cement consumption by one million metric tons in 2010, says PCA Chief Economist Edward Sullivan. Lacking a new highway bill until 2013, highway cement consumption will be based on inflation-eroded SAFETEA-LU extensions, declining ARRA stimulus and extremely weak state fiscal conditions. Pavement projects will drive the measurable consumption rebound projected for 2013, he adds.
Spending from the stimulus package will increase this year as project composition shifts from resurfacing to more cement-intensive work like road widening and bridges, amounting to added powder consumption of 4.1 million metric tons and 2.8 million metric tons in 2010-11. Although nonresidential sectors like oil and farm construction will contribute to the modest 2010 cement consumption increase, shipments tied to commercial building will decline 23.3 percent. The residential sector is projected to remain nearly unchanged from 2009 levels, but is expected to grow 12.1 percent in 2011 as foreclosures flatten and job creation increases.