Cement Forecast Revised Upward

The Portland Cement Association has revised its spring forecast for the cement market upward, expecting increased use through 2014, though uncertainty caused by looming federal budget concerns could wipe out gains in early 2013.

The Portland Cement Association (PCA) has upgraded its prediction for the rest of 2012 and beyond, citing growth in the housing industry and gains in the amount of cement used in construction projects.

PCA revised its spring projection upward, expecting a 6.9 percent increase in 2012 from 2011 levels, followed by a 5.8 percent jump in 2013 and a double-digit increase of 10.9 percent increase in 2014.???(R)???AE'?N????e'?N,A+

''Real put-in-place construction activity is up 4.2 percent compared to 2011 levels,'' said PCA chief economist Ed Sullivan. ''We expect to see a 5.5 percent gain on real construction activity this year, after seven consecutive years of decline.''

Sullivan also said that economic and political uncertainty could undo all of the gains the cement market and the overall economy have made in recent months, specifically due to the erosion of consumer and business confidence caused by the impending ''fiscal cliff'' – an assortment of federal deficit-shrinking budget measures set to kick in at the end of 2012.

''If Congress fails to address the 'fiscal cliff' issue during the first or second quarter of 2013, there is the potential for severe adverse economic consequences . . . potentially leading to a severe decline in 2013 cement consumption,'' Sullivan said. "PCA's baseline projections assume a 'rational' Congress that will recognize these risks and take action to minimize restraints on economic growth.