US: Stronger than expected job creation and the beginning of a construction industry recovery mean gains in real construction spending will materialise in 2012, according to a new forecast from the Portland Cement Association (PCA). The PCA says that increases in cement consumption will follow.
The PCA revised its autumn forecast upward, anticipating a modest 3.7% increase in cement consumption in 2012, followed by a 7.6% jump in 2013 and a 14.1% increase in 2014. The forecast includes marginal improvements to non-residential construction, an upward revision to housing starts and an aggressive cement intensity gain, which is the amount of cement used per dollar of construction activity.
"Cement usage is greatest at the early stages of construction with foundation work. The retreat of building starts during the recession had a huge impact on consumption and intensity," said Ed Sullivan, chief economist at the PCA. "A construction start rebound in 2012 coupled with concrete's competitive price compared to other building materials translates to increases."
Sullivan said that, with successive years of economic and employment growth, the structural issues facing the construction industry will diminish. For example, the adverse impact of foreclosures will fade and return on investment for non-residential investments will improve.
The PCA forecasts that all sectors of construction will be positive during 2014-2015, which typically results in large gains in cement consumption.