US Economy, Tax Reform, Infrastructure Key Drivers of 2018 Construction and Beyond

PCA Chief Economist Ed Sullivan analyzes the impact of tax reform and other factors in a sneak peek at annual cement-consumption forecast at 2018 World of Concrete Show

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Economic momentum supported by tax reform and federal infrastructure programs will play key roles in the demand for concrete construction in the years ahead, said Ed Sullivan, Portland Cement Association (PCA) Senior Vice President and Chief Economist.  At a press conference during the 2018 World of Concrete in Las Vegas, Sullivan offered a glimpse at the association’s upcoming Spring Forecast for cement production and concrete construction.

Sullivan noted the strong economy comes in context of continued strain to find skilled workers, including those needed for construction projects. Weather conditions and other economic factors prompted PCA to revise its 2017 Fall Forecast down slightly, though its fundamental assessments pertaining to the economy, construction markets, and cement consumption remain on target.

“There is little doubt that the near-term outlook for construction and cement consumption in 2018 and 2019 remain favorable,” he said.  “Strengthening economic conditions, with the addition of fiscal stimulus, and in the context of already low unemployment could awaken inflationary pressures.  Down the road, this could lead to an even more stringent monetary policy, leading to an acceleration in interest rate increases and an eventual cooling of construction markets.  If this scenario plays out, it will likely take time to gestate and not materialize to a significant degree until after 2019.”

The PCA Spring Forecast will be released during the first week of March of 2018. PCA’s Market Intelligence Group forecasts are used by construction industry executives to understand the direction America’s economy is headed, which in turn impacts their businesses.