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US cement shipments and construction spending continue to decline

World Cement,

Preliminary data for October 2009 just released by the US Geological Survey indicates that US cement shipments in October were 33.2 % lower than in October 2008. The year to date is down 27.8%.The rate of decline in October was worse than the previous month and was probably at least partly due to the wettest October in the US since data was first collected 115 years ago.

Among the larger states, shipments declined in October in Northern Texas (-50%), Georgia (-46%), Southern Texas (-44%), Northern California (-42%), Florida (-38%), South Carolina (-35%), Southern California (-27%), Arizona (-27%) and Michegan (- 25%).

Building materials businesses
J.P. Morgan report that among the building materials companies researched which have US cement businesses, its estimate of the percentage of mid-cycle profitability derived from all of the US operations (including their non-cement businesses) and their key markets are:

  • Eagle Materials 100% (mainly Texas, Illinois, Wyoming, Nevada, Colorado and Wisconsin for Cement)
  • Cemex: 34% ( Florida, California, Arizona and Texas)
  • Buzzi Unicem: 31% ( states bordering the Mississippi river)
  • Titan: 17% (Florida and Virginia)
  • Holcim: 10% ( Eastern and central)
  • Ciments Francais: 19% ( NE of US)
  • Italcementi: 8% (NE of US)
  • Lafarge: 7% (Eastern half of US)

US construction forecast
Meanwhile, IHS Global Insight report that total construction spending in the US on an annual basis is forecast to fall 5.6% in 2010 before growing 7.6% in 2011 with double-digit growth predicted in 2012.The construction industry in general is showing signs of resurgence, particularly in the residential sector, but nonresidential construction will continue to decline for many more quarters. The residential sector posted the first quarter to quarter increase since the beginning of 2006 and is forecast to grow 9.6% in 2010.However the commercial sector is forecast to drop 28.2%in 2010 and return to positive growth in the second quarter of 2011.

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