Despite a late start to the construction season and weaker than expected housing start numbers, a recently released report from the Portland Cement Association (PCA) shows that cement consumption in the United States will meet 2014 forecast expectations.
PCA’s cement forecast remains essentially unchanged since the September forecast. “The United States’ cement market is expected to grow 8.2 percent in 2014, followed by similar rates of growth in 2015 and 2016,” said PCA Chief Economist and Group Vice President Edward Sullivan. “However, minor adjustments have been made regarding the construction sub-sectors. Housing starts, for example, have been trimmed slightly compared to forecasts released earlier in 2014.”
While single-family housing starts are not reaching projected levels, the report indicates a new emphasis on multifamily starts. Demographic trends and strict mortgage standards are pushing more potential homebuyers into rental units.
Additionally, the oil price environment has changed significantly since the summer and these new impacts have been integrated into the forecast projections for the paving sector.
Going forward, Sullivan noted that the underlying economic fundamentals are strengthening and are reflected in the labor market. Sustained gains in monthly job creation, stronger state and local tax receipts, more favorable return on investments for commercial building and stronger household formation can lead to stronger construction spending in 2015.
