The world’s leading cement makers expect the coming years to be tough in Europe and the United States as rising government debt looks set to squeeze infrastructure spending, the Financial Times said on Wednesday.
As a result, large cement makers such as Holcim and Lafarge are pinning their hopes on demand from emerging markets such as China and India.
"It will be at least three to five years until building materials markets in the most hit mature economies return to their peaks," Markus Akermann, chief executive of Holcim, told the FT.
The slump will be felt most acutely in markets such as Spain. "There are going to be significant structural changes from the construction bubble in Spain, leading to slower growth and a painful adjustment process," Akermann said.
The industry is hopes that large economic stimulus packages will boost demand, although Lafarge, told the Financial Times it had yet to feel the effects of increased government spending in the United States and Europe.
"Even in China, where the government is the most expeditious in pushing its plans through, we are only just beginning to feel the effects of the US$800bn stimulus package," Jean Desazars de Montgailhard, executive vice-president of Lafarge, told the FT.
In spite of this, he said China would lead the way for the foreseeable future.
"The growth we are seeing in China is incomparable with other markets and there is no question now that it will be the engine of expansion for not just cement, but all construction activity during the next 20 years," he said. Holcim’s Akermann also pointed to the shift in demand. "The shift of growth from mature to emerging construction markets will be significant over the next decade," he told the paper.