The Portland Cement Association (PCA) announced it expects U.S. cement consumption to reach 3.5 percent annual growth during the remainder of 2017 and 2018, based on analysis of data and policies likely to impact the industry in the years ahead. Late last year, PCA changed its initial U.S. cement consumption prediction for 2017 from 4.2 percent to 3.1 percent growth.
Speaking at the IEEE-IAS/PCA Cement Conference in Calgary, Alberta, Canada, PCA Senior Vice President and Chief Economist Ed Sullivan said that while details on specific federal U.S. policies are not yet fully available, the association is forecasting growth in the years ahead using conservative baseline estimates for factors such as infrastructure spending and tax reform.
“While fiscal stimulus will boost cement consumption, there are other economic indicators that will temper growth,” Sullivan said. “Infrastructure policies also take time to implement, so you could be looking at 11 to 22 months before new projects truly get underway.”
Tax reform will have a key impact on cement consumption, as it drives consumer spending and confidence that play heavily with the housing sector, according to PCA. “When you hire a worker, you hire a taxpayer,” said Sullivan, noting that additional funds generated from consumer taxes and spending will help drive moderate growth in public construction and housing markets.
“The underlying fundamentals supporting economic growth are positive, though we’ll maintain a watch on how the U.S. government addresses possible inflation and immigration policy,” Sullivan said. “This confidence in stable, sustained growth in cement consumption is likely to be unchallenged through 2018.”