Cement Industry Expects Period of Sustained Growth

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May 04, 2010, 10:30 ET

Gains to materialize in second half of 2010

SKOKIE, Ill., May 4 /PRNewswire-USNewswire/ -- Expected increases in public construction activities will pave the way for improved cement consumption in 2010 and beyond, according the most recent economic forecast from the Portland Cement Association (PCA).

In 2010, PCA anticipates a modest five percent increase in consumption over severely depressed 2009 levels. The three to five million metric tons gain in cement use will materialize during the second half of the year. A 13.3 percent jump is predicted for 2011, followed by an 18.7 percent increase in 2012.

"The 2010 recovery in cement consumption lays largely on expectations for public construction activity," Edward Sullivan, PCA chief economist said. "Spending from the stimulus bill will more than double to $12 billion and that spending is expected to reflect an increased share of major highway construction and bridge projects -- high cement-intensive projects."

Although nonresidential sectors like oil and farm construction contribute to the 2010 cement consumption increase, consumption accrued to commercial building will decline 29 percent on top of a 38-year low reached in 2009. The residential sector is expected to become a modest contributor to growth during 2010 – something that has not materialized since 2005.

"The economy is recovering and improving its core fundamentals. However, recovery for the construction markets will be slowed by the continuation of tight lending conditions, high foreclosure rates and weak job markets," Sullivan said.

About PCA

Based in Skokie, Ill., the Portland Cement Association represents cement companies in the United States and Canada. It conducts market development, engineering, research, education, and public affairs programs. More information on PCA programs is available at www.cement.org.

Note to editors: To obtain a copy of PCA's Forecast contact Patti Flesher at [email protected].

SOURCE Portland Cement Association