PCA expects accelerated second-half demand to spur US market recovery

US cement consumption growth will continue through 2013 and increase by 6.2 per cent YoY, according to the latest forecasts from the Portland Cement Association (PCA), with the majority of market recovery expected to occur in the second half of the year.

"Recessions correct imbalances generated during boom periods," Ed Sullivan, PCA chief economist said. "Few economists doubt the generation of a large pent-up demand during the past several years. The question is, when the economy will unleash its potential for strong growth?"

The recession has created a pent-up demand not just for consumer products but also construction. For example, PCA expects housing starts, to reach nearly 1 million in 2013. Multifamily construction also continues to grow at a strong pace and this trend should continue as favourable fundamentals fuel the sector. Multifamily starts recorded a 55 per cent gain in 2011 and 36 per cent growth in 2012. PCA expects an additional growth of 29 percent in 2013 to 318,000 units.

"Although non-residential and residential will be in full recovery in 2013, public construction will act as a drag on cement consumption this year," Sullivan said. "However, as the economy gains momentum in 2014, job gains will strengthen states' fiscal conditions and support stronger construction spending."

The 2013 consumption forecast has been revised downwards from the 8.1 per cent projected by the PCA back in January this year. However, the association expects accelerated consumption during the second half of 2013 to carry into next year, and therefore upwardly revised the 2014 forecast from 8.3 to 9.2 per cent.

PCA also upwardly revised its long-range projections for 2015-2017. Annual growth during that period is expected to be as high as 11.1 percent. PCA predicts cement consumption levels will reach 120Mt by 2017.