Canadian cement consumption on the decline

Source: Portland Cement Assoication, Skokie, Ill.

According to a recent report by PCA, a weaker assessment for the U.S. economy in tandem with a slower Canadian construction outlook suggests Canadian cement consumption will not perform as previously anticipated.

Overall cement consumption is estimated to have declined 4 to 5 percent in the first half of this year; however, this comparison is made against strong volume gains in the first half of last year. In the context of a weakened Canadian residential sector, a U.S. outlook that has been downside adjusted, a highly leveraged Canadian consumer, and strained provincial budgets, cement demand is expected to decline two percent this year followed by a moderate rebound in 2012.

Although economic fundamentals, such as labor market growth and energy sector investment, are supporting positive economic growth, these fundamentals are not translating toward cement demand. Private sector investment will be insufficient to offset declining demand in residential construction and the lack of stimulus induced infrastructure spending. Energy sector output is expected to retain a firm spending pace offering some support for primary and secondary related infrastructure cement demand; however, this too is viewed as insufficient offset to softer demand in cement intensive public infrastructure projects, a result of constrained government spending.

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