PCA’S Sullivan Firm On 2014 Growth Projection In 8 Percent Range

Although recent indicators point to a tempering of the U.S. economy, Portland Cement Association 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 percent increase the industry logged in 2013 over prior-year volume.

“There is considerable evidence 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 to close out 2013, dropping from 4.1 to 2.6 percent in the third and fourth quarters, he adds, while preliminary first quarter 2014 estimates peg growth at a meager 0.1 percent. Consumer confidence has recorded setbacks, mortgage applications have sustained weekly declines, the housing market has stalled, and real put-in-place construction activity has slowed.

Sullivan traces the principal cause for the recent economic weakness to the unusually adverse weather conditions during the fourth quarter of 2013 and the first quarter of 2014. “[They] had an obvious impact on cement consumption—limiting construction and concrete use. 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.”