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Cement manufacturers forecast modest growth over the next two years

April 6, 2018

The Portland Cement Association’s (PCA’s) market intelligence group estimates that cement consumption will grow by 28% over the next two years and increase by 4% in 2020 as the impacts from potential federal infrastructure spending are likely to take effect. The Spring forecast also estimates consumption at 99.3 million metric tons in 2018, 102.1 million in 2019 and 106.1 million by the end of 2020.   

Ed Sullivan, PCA senior vice president and chief economist, stated that a range of economic factors including a strong economy, job market and anticipated increase in infrastructure spending suggest a modest acceleration in real GDP, construction markets and cement consumption.

The analysis projects that robust infrastructure spending is not likely to occur until the fourth quarter of next year considering the crucial steps that must take place. These include passage of an infrastructure bill, federal and state paperwork, bid letting and review and contract awards leading to construction.

Sullivan said: “it will take time to implement a construction infrastructure program from passage in Congress to the first shovel. This is an aspect often neglected by many economists. PCA has evaluated the time each process takes to impact actual construction activity. As a result, the timing of PCA’s impact of an infrastructure program on actual construction is later than most economists estimate.”

Additionally, the prediction highlighted that while interest rates and inflation are expected to see slight increases, consumer debt is low which by that means adds to potential growth in consumer spending

“These factors suggest a modest acceleration in real GDP, construction markets and cement consumption. Add in benefits from tax reform and we will likely see the economy improving at a more brisk pace”, Sullivan added.

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