Economic conditions to cause drag on cement consumption

December 03, 2009 |

The conditions facing the construction industry are likely to remain weak for another year or more, causing a drag on cement consumption, according to the most recent economic forecast from Skokie, Ill.-based Portland Cement Association (PCA).

PCA expects 2009 will represent this recession’s trough for total U.S. cement consumption—reflecting a 26.6% decline from already weak 2008 levels. A modest 5% increase is expected to materialize in 2010, with significant growth in concrete consumption expected for 2011 and beyond.

“Given this weak outlook for private-sector construction, any near-term turn in overall construction activity will be dictated by public construction,” said Edward Sullivan, PCA chief economist. “Unfortunately, state deficits are sterilizing the spending impacts of the federal economic stimulus plan.”

According to the Center on Budget and Policy Priorities, 33 states are in severe deficit positions for fiscal 2010, compared to 21 for fiscal 2009.

“Reductions in state spending coupled by the slow release of stimulus funds suggest the cement industry will see very little second half stimulatory impact during 2009.”

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