You don’t usually get a pair of sunglasses at a press conference. And, given the recent tough years for the construction industry, receiving a pair at Portland Cement Association’s World of Concrete press event as a way of saying “a bright future is ahead,” was a bit of a suprise.
Chief Economist and new PCA president Ed Sullivan has given a yearly prognostication at the World of Concrete that has been a witch’s brew of tempered gloominess in past years.
But no longer.
“About seven or eight years ago, we were among the first to call for a crash in housing,” says Sullivan, “which was based on our understanding of the underpinnings of the economy. I strayed from the herd then, and today I going stray from the herd again.”
“We believe the the industry has ignored the positive signs.”
Yes, times have been bad, with 8.5 million jobs lost, construction activity decreasing 38 percent, and cement construction declining 45 percent. “Recessions correct past excesses,” says Sullivan, “and the larger the imbalance, the longer it takes to cure. It’s been a long path.”
This is about to change, Sullivan contends.
“We have created all this pent up demand, and each year that pent up demand is generated, that suggests it will be released at some point, both on the consumer and governmental level.” One pent-up demand he cites: In 2009, consumers dropped car purchases by 25 million cars.
But we still have another six months of very tepid growth, Sullivan cautions. Political uncertainty is still around, and employment gains are hanging around 150,000 adds per month. But below the surface, businesses and banks are reevaluating past strategies and preparing for release of money soon, he says. “The trigger is the willingness to spend,” he says. “We’ve got the ability.”
“The pendulum is swinging back,” contends Sullivan. “By this time next year, you’ll be wearing your sunglasses.