LAS VEGAS, NEVADA (Jan. 17, 2023) -- The top economist in the cement, concrete and construction industries predicts a stronger U.S. economy during the first half of this year than was previously expected but believes there will likely be a slowdown in economic growth starting this summer.
Portland Cement Association’s (PCA) Chief Economist and Senior Vice President of Market Intelligence, Ed Sullivan, made the comments today when presenting his economic forecast for the industries at the annual World of Concrete trade show.
Mr. Sullivan explained that with the economy showing more near-term resilience, the Federal Reserve might be more aggressive with rate hikes. Given the timing lags associated with Fed actions, the economic fundamentals will eventually weaken. A recession, characterized by unemployment of 6%, is unlikely.
Mr. Sullivan also predicted that construction in the private sector—which was down in 2022—is expected to take another tumble in 2023. However, strong order books may cushion cement consumption decline until the second half of this year.
In terms of new construction via the Bipartisan Infrastructure Law, Mr. Sullivan said it will likely be softer than many are expecting this year. Inflation, state construction spending reductions (sterilization), and typical spending patterns associated with allocations were cited as principal reasons.
“When looking at the big picture of real construction spending and cement consumption this year, we should expect both volumes to soften throughout the year, with significant declines in the second half of 2023,” Sullivan said. “The downturn is expected to be short-lived as interest rates ease slightly and stronger infrastructure volumes materialize in 2024 and beyond.”
Please find Mr. Sullivan’s presentation shared in today’s press conference HERE.
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The Portland Cement Association (PCA), founded in 1916, is the premier policy, research, education, and market intelligence organization serving America’s cement manufacturers. PCA supports sustainability, innovation, and safety while fostering continuous improvement in cement manufacturing, distribution, infrastructure, and economic growth. For more information, visit www.cement.org.