A surge in commercial and public construction work could help offset a soft housing market and stoke a modest cement consumption increase in 2007-08, reports the Portland Cement Association, a Skokie, Ill.-based trade group.
Higher cement usage is aiding overall consumption, the PCA says, despite a 12.9% drop in new home starts nationwide last year. Homebuilding accounts for about 25% of all Portland cement sales.
“Concrete's relative pricing compared to competing building materials will result in a 2% cement intensity growth in 2007,” said Edward J. Sullivan, PCA’s chief economist, at the Jan. 23-26 World of Concrete exhibition in Las Vegas. “We expect overall construction activity to decline 1.8% in 2007, but concrete intensity growth will more than offset that," Sullivan added.
Consumption, as a result, will grow a modest 0.3% this year followed by a 2.7% increase in 2008. Industrial, resort and office sectors will see strong activity, along with military and security work, the PCA says.
Exhibitors placed more than 30,000-sq-ft. of concrete outside the Las Vegas Convention Center.
Nonresidential and public construction concrete consumption is forecasted to grow 7.6% and 4.4% this year, respectively. Much of the growth will occur in the South, West and Mountain regions due to strong regional economies. But the Great Lakes, Northeast and Middle Atlantic states are still expected to struggle.
“We are going to have more subdued economic growth, but that’s not bad from a historical perspective,” Sullivan said. “The construction market is going to decline, due to residential, but commercial activity and state finances are improving. In 2008, we’re going to see a much better year with more positive gains.”