PCA: economic indicators trend upward

PCA: economic indicators trend upward
Published: 08 October 2014

Tagged Under: PCA USA 

Strong US second-quarter GDP figures, which have been revised upward, further realign economic growth with many indicators that suggest continued, steady improvement, recent PCA commentary states.

Overall, strong job growth and easing of lending standards suggest further acceleration, according to the association. However, construction recovery has been slowed according to the level and degree of the obstacles in specific states and regions, it states. The state rankings are based on economic fundamentals which identify regional markets most favorable for improved cement consumption.

However, the PCA notes that the large state fiscal deficits of the Great Recession have receded and many states expect surpluses for the 2014 fiscal year (FY2014). According to the National Association of State Budget Officers, FY2014 revenues are at or exceeding projected levels in 39 states. Additionally, overall FY2013 state spending surpassed pre-recession highs for the first time. With that said, public spending levels are still below past peaks in many states on an inflation adjusted basis. The magnitude of past public spending cuts, combined with apprehensive budget officials has kept a lid on public construction spending despite rising tax revenues.

Given the steady healing, PCA believes public construction spending will slowly improve in 2015 and start to reflect the improving state fiscal climate. Overall, North Dakota, Texas, South Dakota, Nebraska, and Iowa have the strongest relative construction fundamentals.