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PCA forecasts cement consumption decline 

The Portland Cement Association (PCA) has released its Fall Forecast, which predicts cement consumption will lessen by 1.5% for the remainder of 2020 and 0.9% in 2021. 
November 11, 2020 Read time: 2 mins
PCA believes 'U' is the most likeliest scenario  (© Marian Mocanu | Dreamstime.com)
PCA believes 'U' is the most likeliest scenario  (© Marian Mocanu | Dreamstime.com)

The PCA says the forecast discusses three economic recovery scenarios that 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 as cement consumption in 2021 nearly reaches 2020 levels. 

Additionally, 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. It would lead to an acute decline in cement consumption in 2021 and a slower path to recovery. 

The 'Vaccine' scenario is expected to follow 'U' through the first half of 2021 while a vaccine becomes widely distributed by the third quarter of 2021.  Cement consumption would grow throughout the forecast horizon.

Ed Sullivan, PCA senior vice president, says: "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.”

The PCA describes public construction as an area of risk, emphasising that federal support has been successful in preventing a deeper and more prolonged downturn in economic recovery.

Insufficient federal support over the next two quarters could represent another key area of weakness and risk going into 2021, the association adds. 

 

 

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