US Southeast's comeback story
Cement demand in the US Southeast (ie, Florida plus the ‘Piedmont’ states of Alabama, Georgia, Tennessee and North and South Carolina) was hard hit by the Great Recession. Since the 2010 trough, demand recovery in the region has been the strongest among the five US divisions but remains volatile and well below previous highs. Nevertheless, long-term prospects are better than average. By Rob Roy, ROI Consulting, USA.
Cement consumption in the US Southeast reached an all-time high of 27.1Mt in 2006. The Great Recession (spanning the December 2007- June 2009 period) dragged demand down by 60.9 per cent to a low of 10.6Mt in 2010.
Since then consumption has recovered to reach 14.3Mt in 2014 and is expected to be around 15.5Mt in 2015 but remains 42.8 per cent below the peak. Like the majority of US states, the Southeastern states have only partially recovered since 2008 with cement consumption remaining well below prior highs.
At 3.26 per cent per year, Southeast cement demand had a faster compound annual growth rate (CAGR) over the past century than the other four divisions – Southwest, West, Midwest, and Northeast. The national average CAGR was 2.82 per cent per year. Southeast demand growth was especially strong between the cyclical peaks of 1979 and 2005 with a difference of 121.2 per cent between the two peaks compared to the national average of 62 per cent. However, the Great Recession was particularly harsh on this region’s cement market with volumes plummeting 60.2 per cent from 2005 to 2010, worst of any division.
Underlining the volatility of Southeast cement consumption, it has been the strongest performer since the 2010 US trough, up 40.8 per cent between the 12-month periods ending August 2010 and August 2015. However, despite having the best recovery in cement sales among the five divisions since 2010, the Southeast remains the furthest below the 2005 US peak at 40.8 per cent, compared to the 27.2 per cent national average for the 12-month periods through August in 2010 and 2015.