SKOKIE, Ill.—Experts predict cement consumption this
year to increase more than five percent over 2004 levels,
despite this year’s hurricanes. Residential construction
is expected to decline due to raising mortgage rates in 2006;
however, increases in commercial construction and public works
construction will more than offset the residential slowdown
and provide a net cement consumption gain in 2006.
Closely in line with its summer, pre-Katrina forecast, the
Portland Cement Association (PCA) Fall 2005 Economic Forecast
projects that more than 120 million metric tons of cement
will be used in 2005, an increase of 5.2 percent from 2004,
with consumption rising an additional 3.7 percent in 2006.
“This summer’s hurricanes served as a trigger
point to start slightly slower economic growth,” Ed
Sullivan, chief economist for PCA, said. “Higher home
heating costs, rising inflation and rising interest rate levels
will cause some construction slowdowns. Fortunately the re-building
of the Gulf Coast, particularly New Orleans in the later half
of 2006, will contribute to keeping cement consumption on
track with earlier forecasts as will increases in public construction.”
According to Sullivan, although re-building New Orleans could
consume 650,000 to 1.8 million tons of cement each year of
an expected five-year process, additional imports will not
be necessary to fill this need. “The slightly more adverse
economic environment early in 2006 will act to neutralize
the additional cement consumption anticipated from the post-Katrina
rebuilding efforts.”
The U.S. is expected to import 33 million tons of cement
in 2005, roughly 27 percent of the cement consumed. PCA’s
fall forecast projects 2006 imports to reach 35 million tons,
in-line with earlier, pre-Katrina estimates.
About the Fall Forecast 2005
PCA’s Fall Forecast begins with a macroeconomic look
at the components of economic growth. Based on those factors,
PCA evaluates the impact on construction, breaking down the
public, nonresidential and residential sectors. The cement
and concrete forecast is derived from construction sector
assessments.
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.
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Note to editors: To obtain a copy of PCA’s Fall
Forecast contact Patti Flesher at newsroom@cement.org.
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