Speaking at World of Concrete 2014, PCA’s Chief Economist, Ed Sullivan forecast 8% growth in cement production this year driven by demand in residential, nonresidential and public construction. According to Sullivan, the unprecedented level of pent up demand puts the economy in good shape for ‘strong consumer growth going forward’.
Favourable housing affordability levels and easier mortgage lending standards are important factors for growth in the residential sector. Sullivan pointed out that housing starts increased 18% last year and should fare the same this year, while 2015 will continue to see double-digit gains. In terms of public construction, Sullivan is expecting state/local governments to turn their attention to neglected infrastructure projects.
Sullivan is expecting GDP growth of 3 – 4% this year, but warns that further interference from Congress could throw a spanner in the works. The debt ceiling extension is likely to make it back into the news in the coming weeks as the extension of US borrowing authority expires on 7 February. The last round of discussions resulted in the government shutdown, which lasted for two weeks and cost the country billions of dollars.
Edited from various sources by Katherine Guenioui