The Portland Cement Association has released the annual spring forecast and it’s quite positive. According to a press release from the organization, it envisions modest growth for cement consumption over the next two years.
“PCA’s Market Intelligence Group estimates consumption to grow by 2.8 percent in both 2018 and 2019, and then to climb by 4 percent in 2020 as impacts from potential federal infrastructure spending are likely to take effect. The analysis estimates consumption at 99.3 million metric tons in 2018, 102.1 million in 2019 and 106.1 million by the end of 2020.”
Ed Sullivan, PCA senior vice president and chief economist says factors such as a strong economy, job market and anticipated increase in infrastructure spending – “suggest a modest acceleration in real GDP, construction markets and cement consumptions”
While this is great news for the concrete industry as a whole, Sullivan suggests contractors won’t realize the true impact until the fourth quarter of 2019. This is in part due to the things that must occur including the passage of an infrastructure bill, bid letting and review and awarding contracts to contractors. Bottom line, the implementation is going to take time.
Sullivan says, “PCA has evaluated the time each process takes to impact actual construction activity. As a result, the timing of PCA’s impact of an infrastructure program on actual construction is later than most economists estimate.”
While the 4th quarter of 2019 is a long time to realize any of the benefits, time could be the biggest benefit to concrete contractors. I continue to hear from contractors who report being busier than ever before, with projects booked well into the end of 2018 and some even say into early 2019. Contractors continue to struggle to find skilled laborers which could slow down the completion of some projects, it appears to me contractors will be able to fill the time gap with the current work load.
It is my prediction, the current boom in construction projects utilizing concrete will not be going away anytime soon. In fact, come late 2019, I will predict the current construction boom will continue long into 2020, barring any major economic shift which could occur.
