Job creation is key to improving many economic indicators,
and its reduction translates into a longer wait for the construction and
cement recovery. Even with an economic recovery, construction levels will
remain at new floor levels and lead to relatively flat cement consumption
until 2014, according to the most recent economic forecast from the
Portland Cement Association (PCA).
The PCA revised its cement consumption forecast to increases of 1.1%
in 2011, 0.5% in 2012 and 7.4% in 2013 – roughly half of the
previous forecast. According to the report, large structural issues exist
in each construction sector that will slow recovery.
"The Great Recession was construction focused. Residential,
nonresidential and state discretionary construction levels collapsed,"
Edward Sullivan, PCA chief economist said. "Despite economic growth, the
residential sector, for example, will continue to be plagued by a large
volume of foreclosures, tight lending standards and weak new home prices.
I don’t see a rebound in most of that market until 2014."
Recovery for the construction industry is tied to general economic growth
and job creation. Job creation will reduce, and eventually eliminate, the
adverse impacts of foreclosures, tight lending standards, commercial
occupancy and leasing rates as well as the severity of state fiscal
conditions. However, because the impediments to a construction recovery
are so large, even if an acceleration in economic growth and job creation
occurs on a sustained basis, the benefits will not materialise quickly.
According to Sullivan, nonresidential construction will also remain low
until 2013, and lack of assured federal funding will drag down the public
sector until 2014.