Cemex, the world’s top building materials company by revenue, is set to post its second consecutive annual decrease in U.S. cement sales volumes, the firm said on Tuesday.
Cemex , which is facing a downturn in its top market as the U.S. housing market slumps, expects "a small decline" in U.S. cement sales volume next year, Francisco Garza, president of Cemex’s North America division, told reporters in the northern Mexican city of Monterrey.
"Housing construction permits have been falling this year, but we think that could stabilize in the second or third quarter of the coming year," he added.
Cemex, which increased its presence in the United States with its July takeover of Australia-based Rinker, said in October it expects its U.S. cement volumes to fall 17 percent in 2007.
Garza said Cemex sees a recovery starting in late 2008.
"The consensus is that (the slowdown) will bottom out next year, and (cement demand) will start to grow at the end of 2008," Garza added.
Monterrey-based Cemex, which has operations in more than 50 countries, hopes to raise U.S. cement prices next year, particularly in Florida, where it has a strong presence, passing on higher energy and logistics costs to consumers to offset the fall in sales.
The U.S. is facing a crisis in its subprime mortgage sector that caters to borrowers with poor credit histories. That is bad news for a sector also suffering from an inventory build-up.
But Cemex said the outlook was brighter in Mexico, where it expects cement volumes to grow around four per cent next year.
"We see cement volume growth (in Mexico) at around 4 percent, driven by housing and infrastructure projects," Garza said.
Easier access to credit has prompted a low-income housing boom in Mexico, while the government of President Felipe Calderon has unveiled a multibillion-dollar plan to overhaul the country’s aging road, rail and airport network.