U.S. CEMENT MANUFACTURING CAPACITY, FEBRUARY 2017
The existing economic fundamentals characterizing the U.S. economy are relatively sound, as are those facing the construction and cement industries. Even without added stimulus to the economy, construction activity and cement consumption are likely to record sustained gains. The prospect of tax reform and an aggressive infrastructure spending program will add to the near-term economic growth and cement consumption.
While uncertainty remains regarding the details of Trump stimulus programs, PCA conducted a study that evaluates various policy scenarios that may unfold. In each scenario, added fiscal stimulus (tax reform and increased infrastructure spending) adds new layers of economic demand to an already sound economy and results in rising inflationary expectations, Federal Reserve policy reactions and rising interest rates. These market and policy reactions are likely to partially offset some demand for cement arising from infrastructure initiatives.