Sources: Portland Cement Association, Skokie, Ill.; CP staff
In his latest cement shipment and concrete output forecast, PCA Chief Economist Ed Sullivan affirms a positive trend likely to begin in July: 2010 cement consumption up 5 percent over 2009, which caps a two-year decline of 38 percent against 2007 figures, followed by 2011-12 gains of 13.3 percent and 18.7 percent. The latter projections represent minor adjustments from Sullivan's forecast entering 2010, yet spell the underpinnings of an industry rebound from a catastrophic business drop recalling the Great Depression.
The 2010 recovery lays largely on expectations for public construction activity, says Sullivan. Stimulus bill [spending] will more than double to $12 billion and is expected to reflect an increased share of major highway construction and bridge projects--high cement-intensive projects.
The economy is recovering and improving its core fundamentals. However, recovery for the construction markets will be slowed by the continuation of tight lending conditions, high foreclosure rates and weak job markets.
Although nonresidential sectors like oil and farm construction contribute to the 2010 cement consumption increase, commercial building-related consumption will decline 29 percent on top of a 38-year low reached in 2009, he adds. The 2010 residential sector is expected to become a modest contributor to growth for the first time in five years.