PCA economist firm on 2014 growth projection in 8 percent range
- Written by Concrete News
Sources: Portland Cement Association, Skokie, Ill.; CP staff
Although recent indicators point to a tempering of the U.S. economy, PCA is maintaining its forecast for steady growth in construction and cement consumption during the next five years, starting with a projected 7.9 percent increase this year in powder shipments, nearly double the 4.5 increase the industry logged in 2013 over prior-year volume.
“There is considerable evidence that the economy’s growth path has softened during the past several months, but we believe underlying economic fundamentals are stronger than the data suggest,” affirms PCA Chief Economist Ed Sullivan.
Real GDP weakened considerably during the fourth quarter to 2.6 percent from 4.1 percent in the third quarter of 2013. Preliminary first quarter estimates growth at a meager 0.1 percent. Furthermore, consumer confidence has recorded setbacks, mortgage applications have recorded sustained weekly declines, the housing market has stalled, and real put-in-place construction activity has slowed.
The principal cause for the recent economic weakness, according to Sullivan, is the unusually adverse weather conditions across the United States during the fourth quarter of 2013 and first quarter of 2014. “The weather conditions had an obvious impact on cement consumption – limiting construction and concrete use. The northern states and much of the east coast were hit hard, with year-over-year losses of as much as 25 percent. However, despite this drag, nation-wide cement recorded gains. Through the first quarter, cement consumption increased 4.5 percent compared to the same period in 2013.”