Cement consumption grew by 8 percent in 2014 and is on track to grow another 8 percent in both 2016 and 2017, according to Ed Sullivan, chief economist, PCA, noting that the 100 metric million tons realized in December was the highest month total since January 2008. Sullivan made his remarks during the opening day of World of Concrete in Las Vegas Tuesday.
“The fuel that’s pushing this recovery is job creation, job creation, job creation,” Sullivan says, noting it was no longer a “McDonald’s job creation.” As a result, the country is seeing “remarkable and sustained gains in consumer confidence” as inflation continues to be under control and banks are gradually easing lending standards.
Sullivan is also calling this year’s World of Concrete “unlike any of the past decade. Walk the halls and there is broad based, and in some cases, unbridled optimism.”
On the residential side, Sullivan sees housing starts exceeding 1.2 million. But multifamily will lead the way as especially first-time buyers continue to trickle into the market.
Nonresidential construction will see continued strength, as will public construction, where especially state and local agencies are seeing finances recovering, and are now in a better position to spend more on previous neglected infrastructure.
The decline in oil prices is two sided, Sullivan says. On one hand, it’s contributing to general economic growth, but has had a negative impact on the oil producing areas. He warns, however, that the long term impacts of today’s low prices on construction may be “small and muted” and not show up until next year.