Against a calming of the U.S. economy, cement consumption is pacing 129.6 million metric tons this year, a 2.3 percent boost compared to 2005 shipments.
Against a calming of the U.S. economy, cement consumption is pacing 129.6 million metric tons this year, a 2.3 percent boost compared to 2005 shipments. Higher interest rates, oil prices, and inflation will slow consumer spending, says Portland Cement Association Chief Economist Ed Sullivan. These forces will result in a residential building decline and slow nonresidential construction recovery in 2006 and 2007. Slower job growth will contribute to a more cautious public spending, he adds.
Included in PCA’s summer forecast, the moderate jump for 2006 is a slight downward projection from the 3.5 percent increase Sullivan noted in his spring outlook. The current forecast also calls for additional demand in 2007, with a 1.2 percent increase in powder consumption over the nearly 130 million ton figure projected for this year. If projections hold, 2007 would mark a fourth consecutive record year for cement demand.
Additionally, PCA finds that tight supplies of the past two years have been dramatically reduced. According to its most recent market conditions survey, only two states reported tight powder supplies, versus 30 states in 2004-2005. Large gains in cement imports during the first half of 2006 have helped ease shortages.