PCA forecasts cement consumption decline
Published by Emily Thomas,
Deputy Editor
World Cement,
The Portland Cement Association (PCA) has released its annual Fall Forecast which predicts a modest decrease in cement consumption during 2020 and 2021. PCA Market Intelligence expects cement consumption, based on the weighted average of three different economic scenarios, will lessen by 1.5% for the remainder of 2020 and 0.9% in 2021.
The forecast discusses three economic recovery scenarios. All scenarios are characterised by a significant increase in COVID-19 infections during the fourth quarter of 2020. The ‘U’ shaped scenario would entail an increase in COVID-19 consistent with many baseline epidemiologist’s projections. In this scenario, the economy achieves a gradual sustained recovery. 2021 cement consumption under this scenario nearly reaches 2020 levels.
The ‘W’ shaped scenario would entail an increase in COVID-19 consistent with many high-case epidemiologist’s projections. According to this scenario, consumers’ retreat, state governments become more active in preventing COVID-19’s spread, and a two-quarter recession develops in 2021. Cement consumption’s decline is more acute in 2021. The path of recovery under this scenario is also slower.
Finally a ‘vaccine’ scenario, the best possible outcome, follows the ‘U’ through the first half of 2021 and a vaccine is widely distributed by third quarter 2021. Under this scenario, cement consumption grows throughout the forecast horizon.
"We think that the gradual sustained recovery, the ‘U’, has the largest likelihood followed by the ‘vaccine’ scenario. The growth interrupted ‘W’ scenario is the least likely," said Ed Sullivan, PCA Senior Vice President and Chief Economist. “Non-residential will be among the weakest construction sectors specifically within retail, hotel and office. Combined that accounts for almost 90% of the declines we're expecting in this sector.”
Public construction represents another area of risk. Not only has Federal support been successful in preventing a deeper and more prolonged downturn in economic recovery, it has supported state governments as they rack up huge deficits. This in turn has supported public construction activity. Insufficient Federal support over the next two quarters could represent another key area of weakness and risk going into 2021.
Read the article online at: https://www.worldcement.com/the-americas/16102020/pca-forecasts-cement-consumption-decline/
You might also like
Ready to revolutionise the cement industry?
Join World Cement in Lisbon, 10 – 13 March 2024, for our first in-person conference and exhibition: EnviroTech.
This exclusive knowledge and networking event will bring together cement producers, industry leaders, technical experts, analysts, and other stakeholders to discuss the latest technologies, processes, and policies being deployed at the forefront of the cement industry’s efforts to reduce its environmental footprint.
Deccan Cements Ltd awards KHD clinker grinding line upgrade
Indian cement producer, Deccan Cements Ltd, has awarded KHD a contract to increase capacity at an existing clinker grinding plant.
