The Portland Cement Association (PCA) has revised its spring cement consumption forecast upwards, following favourable weather conditions and gains in both construction activity and cement intensity in the first half of 2012.
The PCA anticipates a 6.9% increase this year from 2011 levels, followed by a 5.8% increase in 2013 and a rise of 10.9% in 2014.
Ed Sullivan, PCA Chief Economist, said: “In addition to great construction weather during the first half of the year, real put-in-place construction activity is up 4.2% compared to 2011 levels.” Sullivan continued: “We expect to see a 5.5% gain on real construction activity this year, after seven consecutive years of decline.”
The PCA also estimates that the drop in construction starts were responsible for approximately 75% of the cement decline during the recession, as cement usage is at its greatest during the early stages of a construction project.
Looking forward, Sullivan believes that the short-term economic outlook is uncertain, which may inhibit stronger growth conditions. There is particular concern over a so-called ‘fiscal cliff’ – where, under current law, tax increases and reductions in spending will reduce the federal budget deficit between 2012 and 2013.
“If Congress fails to address the ‘fiscal cliff’ issue during the first or second quarter of 2013, there is the potential for severe adverse economic consequences that could slow the recovery process, potentially leading to a severe decline in 2013 cement consumption,” Sullivan said. “PCA’s baseline projections assume a 'rational' Congress that will recognise these risks and take action to minimise restraints on economic growth.”
Adapted from press release by Callum O'Reilly
Read the article online at: https://www.worldcement.com/the-americas/03082012/pca_revises_spring_cement_consumption_forecast_upwards_1184/