Following the strongest cement consumption gains in seven years in 2012, cement consumption growth will continue in 2013 with a 6.2% increase. According to the latest forecast from the Portland Cement Association (PCA), the majority of market recovery will occur in the second half of 2013.
"Recessions correct imbalances generated during boom periods," Ed Sullivan, PCA chief economist said. "Few economists doubt the generation of a large pent-up demand during the past several years. The question is when the economy will unleash its potential for strong growth."
The recession has created a pent-up demand not just for consumer products but also construction. For example, PCA expects housing starts to reach nearly 1 million in 2013. Multifamily construction also continues to grow at a strong pace and this trend should continue as favorable fundamentals fuel the sector. Multifamily starts recorded a 55% gain in 2011 and 36% growth in 2012. PCA expects an additional growth of 29% in 2013 to 318,000 units.
"Although nonresidential and residential will be in full recovery in 2013, public construction will act as a drag on cement consumption this year," Sullivan said. "However, as the economy gains momentum in 2014, job gains will strengthen states' fiscal conditions and support stronger construction spending."
The accelerated consumption predicted during the second half of 2013 should carry into the following year. PCA projects an increase of 9.2% for 2014.
PCA also upwardly revised its long-range projections for 2015-2017. Annual growth during that period is expected to be as high as 11.1%. PCA predicts cement consumption levels will reach 120 million metric tons by 2017.