PCA Chief Economist Ed Sullivan has again revised his cement shipment forecast downward for this year, projecting a 6.8 percent drop against 2006 figures, followed by a 1.8 percent drop in 2008
Source: Portland Cement Association, Skokie, Ill.
PCA Chief Economist Ed Sullivan has again revised his cement shipment forecast downward for this year, projecting a 6.8 percent drop against 2006 figures, followed by a 1.8 percent drop in 2008. He cited the outlook in presentations to PCA members at a meeting earlier this month in Chicago, noting how figures assumed the most recent federal funds rate cuts plus anticipated additional cuts through early 2008.
“The sub-prime crisis is viewed as a residential sector issue,” he said. “We believe it will spill over into commercial lending, hindering nonresidential construction activity. Additionally, high inventory conditions in the residential market will suppress that sector and slow down recovery efforts.”
The sub-prime crisis also will bleed into consumer spending, which generates more than two out of every three dollars of the U.S. economy, Sullivan observed, adding, “When the growth rate of consumer spending is impaired, it adversely impacts job growth and overall economic performance.”