PCA predicts 4% growth in cement consumption this year, 9.7% next year

The Portland Cement Association (PCA) has released its latest forecast, which predicts 4% growth in cement consumption this year, rising to 9.7% in 2014 and 2015.

“Nearly two-thirds of the anticipated growth in 2013 cement consumption will be caused by gains in the residential construction market,” Ed Sullivan, PCA chief economist said. “Home inventories are declining, signalling that it is time to start building, while the lingering effects of damaged credit due to foreclosure activity have created a robust apartment demand."

PCA believes that consumer and business attitudes will increasingly focus on the positive economic fundamentals, paving the way for an improved willingness to spend and reinvest in capital.

“Sentiment and confidence indices are extremely volatile. Business sentiment now stands at pre-recession levels,” Sullivan said. “Assuming Congress has learned its lesson from the fiscal cliff and will take a more rational approach with the upcoming debt limit discussions, political uncertainty and its adverse impact on the economy is expected to dissipate.”

Looking further ahead, Sullivan predicts an increase in local spending on public construction beginning in fiscal 2016.  As a key driver of cement demand, this is an important development. The PCA forecasts an 11% consumption gain for 2016.

Edited from various sources by Katherine Guenioui