Portland Cement Association (PCA) Market Intelligence Group’s Senior Vice President and Chief Economist Ed Sullivan presented their annual Spring cement consumption forecast, predicting an increase in cement consumption for 2021 and 2022.
“Remarkably, U.S. cement consumption recorded 2% growth during 2020. It is remarkable because COVID-19 exerted a terrible toll on the economy. Consumers bunkered down; states enacted rigid lockdowns. Real GDP declined to a rate not matched since 1946 as the economy transitioned from war time to peace time,” said Sullivan. “Nearly 9.5 million fewer jobs now exist compared to pre-COVID-19 levels. Many businesses did not survive the threat. And yet through all of this, cement consumption grew.”
Sullivan noted while major storms resulted in a weak 2021 start, it is likely that cement consumption growth will match or exceed 2020’s performance. Record low mortgage rates have prompted strong gains in 2020 single family construction. The low rates are expected to remain in-place through 2021, resulting in further strong demand for cement consumption. Nonresidential declines are expected to continue this year and next, but the drag on overall growth is expected to lessen. And as oil prices rise, oil well cement will increase as well. This recovery is predicated on continued progress in fighting COVID-19.
Sullivan mentioned that the most significant long-term impact on cement consumption may unfold this year, the proposed $2.2 trillion, 8-year infrastructure program. The program expands the traditional definition of infrastructure and contains more than $1.2 trillion in low or no cement intensive projects. If the Biden administration’s proposal passes as is, it could contribute more than 7 million metric tons annually.
However, it is worth mentioning that it is not yet clear whether the program will be approved and, if so, what will its contents be.
