It is 2024, and another new year has us looking ahead at what might be in store for the construction materials and cement industries. If you gauge a year by production volume, you could say 2023 was a bit of a disappointment.
A look at the latest cement production numbers from the U.S. Geological Survey (USGS) reveals that shipments for the year through September 2023 totaled an estimated 80.7 Mt, a 2.6% decrease from those for the same period in 2022.
Ed Sullivan, senior vice president and chief economist at the Portland Cement Association, told Cement Products, “We are expecting a 3% decline for 2023, followed by marginal growth for 2024. The first half will be rough and mirror the weakness we have seen during the last six months of this year. We are expecting interest rates to broadly decline in the second half of 2024. This will add support to private construction in the second half. Infrastructure spending is expected to play a greater role in 2024.
“The upshot? 2024 starts weak,” Sullivan said. “A lot of pessimism will surface and most will expect another decline. They could be correct. We are expecting second-half strength to barely outweigh first-half weakness.”
Pierre Villere of Allen-Villere Partners notes in the latest edition of The Pulse:
- The Federal Reserve raised its benchmark rate 11 times to cool inflation, with the last rate increase in July. Most recently, the Federal Reserve held rates steady in December for the third straight time and acknowledged a possibility of three rate cuts in 2024.
- Inflation has been gradually moderating – 3.1% year-over-year in November 2023 compared to 3.2% in October – the largest force in November was due to lower gasoline prices.
- The continuation of inflated housing prices, the presidential election, and whether or not we will truly see rates cuts are all things to watch in 2024 as they will have a significant impact on the overall economy.
For 2024, the Dodge Construction Network (DCN) predicts U.S. economic growth will slowly begin to improve as inflation subsides and the Federal Reserve begins to lower interest rates. DCN is calling for total construction starts to gain 7% to $1.2 trillion after growth slowed to just 1% in 2023 (and was down 2% after adjusting for inflation).
It’s going to be a very interesting year. We will be watching the economic indicators closely.
Mark S. Kuhar, editor
[email protected]
(330) 722‐4081
Twitter: @editormarkkuhar
