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New Cement Forecast: No Big Rebound Until 2013

The most recent economic forecast from PCA indicates that cement consumption will not begin a significant rebound until 2013. PCA anticipates a modest increase in cement consumption for 2010, up just 2.4 percent from last year’s severely depressed levels. For 2011, PCA predicts a gain of 6.7 percent, followed by an 8.4 percent increase in 2012. The bigger turnaround is not expected until 2013 when highway and street cement consumption gets back on track and leads to an 18.8 percent increase.

There are a variety of reasons for the delay in the growth that had previously been anticipated, including delays in an extension of a federal highway bill. In addition, due to the large deficits many states are facing, state spending is expected to decline over the next two years as states channel funds into higher priority areas.

Spending from the stimulus package will increase in 2010 and composition of the projects will shift away from resurfacing to road widening and bridge work, which are more cement intensive projects. This will attribute 4.1 million metric tons this year followed by 2.8 million metric tons in 2011.

Although residential sectors such as oil and farm construction will contribute to the modest 2010 cement consumption increase, consumption accrued to commercial building will decline by 23.3 percent. The residential sector is projected to remain nearly unchanged from 2009 levels, but is expected to grow by 12.1 percent in 2011 as foreclosures flatten and job creation increases. 

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