Cement market overview: North and South America

Cement market in North America

The general situation in North America is said to be improving, albeit slowly. It is certainly looking better when compared with the problems that currently beset the mature markets in Europe. Residential construction is gradually improving in the US, and the PCA predicts that there will be some small gains in cement consumption emanating from the residential sector during this year. While the residential sector is showing modest improvement, the construction industry in general is still operating in a difficult environment. Although the unemployment situation is improving there is still a long way to go. The PCA has indicated that if the new pace of job creation can be sustained, the construction industry might see a speed up in activity. PCA’s Chief Economist, Ed Sullivan, suggests that modest growth will be the feature of the US cement industry this year and for much of 2013. By contrast with Europe, the winter weather in North America was mild and this ensured that the major players were able to report on favourable growth, and in some instances on strong growth in sales and volume flows. Predictions are generally in agreement with those coming from the PCA. Of course it is election year and one can only speculate how the result will affect long-term growth prospects in the country. The story out of Canada is one of growth emanating from residential high-rise and commercial construction, particularly in Ontario. Analysts are suggesting a 1% growth this year leading to 2% in 2013.

Cement industry developments in Latin America

With the US beginning to pick up, the dampening effect of the US debt crisis in Mexico and Central America decreased slightly. Holcim reported that demand for building materials in its Latin American group continued to grow due to numerous private and public sector investment projects, especially from infrastructure and housing projects. In Colombia, the construction sector has grown as a result of brisk demand from the oil and mining sectors. Increased tourism will stimulate plans for the construction of hotels, condominiums and golf projects, particularly in and around the major cities of Cartagena, Santa Marta and Barranquilla. Reconstruction work following the floods at the end of 2011 in El Salvador has been useful for the cement industry. At the same time, Cemex will have been satisfied with its Q1 2012 sales figures, which were up by 30% on the same quarter in 2011 as a result of its operations in South, Central America and the Caribbean. In Panama, work on the US$5.3 billion expansion of the Canal that began in 2006 is now predicted to be finished in 2015, rather than in 2014 as originally planned.

Cement consumption continues to grow in Brazil

Brazil’s economy grew by 2.7% in 2011 and, even though it has begun to wobble a bit this year, the government is determined to safeguard it from any repercussions that might come as a fallout from the Eurozone crisis. Housing, particularly for low-income families, is said to be top of the government’s list of priorities. The construction industry, coupled with the cement industry, is responding to the infrastructure needs of the country and especially as it prepares for the 2014 FIFA World Cup and the 2016 Olympic Games. In 2011 cement consumption increased by 7% and it is expected that this figure will be repeated this year.

Sources

Company reports and press releases, online news agencies, Reuters, the PCA, The Daily Star, The Jakarta Post, Business Standard and other newspapers, World Cement (April & June 2012 issues).

Written by Paul Maxwell-Cook.

Read the article online at: https://www.worldcement.com/the-americas/04072012/cement_market_growth_construction_north_south_central_america_1153/