Cement, Construction Forecasts Up Thru 2013 & Beyond
PCA expects the accelerated cement consumption predicted during 2013 to continue into the following years, with an 8.3 percent increase in 2014, and annual growth as high as 9.2 percent through 2017. (Cement consumption is dictated by the level of construction activity and by the prevailing cement intensity.) While 2017 cement intensity levels remain well below pre-recession averages, and upside risks remain, these risks have been significantly reduced.
The Portland Cement Association (PCA) is predicting strong growth rates and an increase in cement consumption within the construction industry in 2013. According to the association’s predictions, improvements in the economy, pent-up demand and the reduction of uncertainty from the fiscal cliff will combine to benefit the cement market.
The PCA forecast expects an 8.1 percent growth in cement consumption in 2013, significantly higher than the sluggish growth projected in the association’s previous report. The January report marked 2012 consumption at 78.5 million tons, an 8.9 percent increase on the 2011 figure.
"Growth in 2013 cement consumption will be largely driven by gains in residential construction,” said PCA chief economist Ed Sullivan. “Housing starts should reach nearly 950 000 units, with single-family construction near 700,000 starts during 2013. We should see starts hitting the one million mark in 2014 or 2015."
Sullivan cautioned, however, that early 2013 would actually show declines compared to the same period in 2012. “It is important to point out that this potential decline in first quarter growth rates does not signal a weakening in market fundamentals, but rather a hangover from favorable 2012 weather conditions. Stronger gains in cement consumption growth are expected during the second quarter.”