PCA cuts projected 2010-2012 consumption gains by nearly two-thirds

Source: Portland Cement Association, Skokie, Ill.

Sustained labor market weakness, and the ripple effect it will have on residential and public or private nonresidential and nonbuilding construction over the next 26 months, has prompted PCA Chief Economist Ed Sullivan to revise downward his forecast of cement consumption and concrete output. He anticipates nearly flat growth this year, with a 0.3 percent increase above very depressed 2009 cement shipment levels, followed by 1.4 percent and 4 percent increases in 2011 and 2012, respectively. The projected 5.7 percent gain through 2013 represents a nearly two-thirds drop from the 16.5 percent gain noted in his most recent (August) 2010-2012 cement shipment outlook.
“Future gains in construction activity are dictated by labor conditions today,” Sullivan affirms. “Slow job growth leads to slower home purchases and start activity; it undermines the speed at which state deficits can heal, [thereby] impacting public construction; and, implies low occupancy rates for the non-residential market.” While small percentage gains could characterize each of these segments during the next two years, he adds, substantive cement consumption volume gains are unlikely to materialize in until 2013.