PCA forecasts falling US cement consumption growth rate

The Portland Cement Association (PCA) Market Intelligence Group forecast for cement consumption over the next two years in the USA predicts a falling growth rate. Growth is expected to decelerate from 2.9 per cent this year to 2.6 per cent next year and further to 1.6 per cent in 2020.

"We are expecting relatively modest but sustained interest rate increases after 10 years of low and stable rates," said PCA Senior Vice President and Chief Economist, Ed Sullivan. "The Federal Reserve’s actions will gradually slow the construction sector’s growth due to, among other things, the higher mortgage rates for residential buildings and higher borrowing cost for nonresidential buildings.

"While the tax cuts passed at the end of 2017 have helped to boost the overall economy, the rising debt will frame the discussion of future federal public infrastructure spending."

PCA's overall projection for the US economy suggests considerable strength that will take time to unravel. The seeds of a gradual softening will arise from rising interest rates, the emergence of fiscal difficulties at the state level at a time of relative prosperity, and the aging of the recovery, stated the PCA.

PCA forecasts the GDP growth rate for USA to be 3.1 per cent this year, 2.7 per cent in 2019 and 2.2 per cent in 2020. The unemployment rate now below  four per cent, is expected to trend down – intensifying labor shortages and leading to stronger wage gains.

"America's economy is unquestionably strong and resilient," said Mr Sullivan. "The real GDP growth is healthy, wage growth is up, and both the unemployment rate and consumer household debt are at near record lows. While interest rates are rising, they have not reached a threshold that would cause a significant adjustment to the positive overall growth projections."