U.S. cement consumption will be down slightly from fall growth projections, according to the latest cement consumption forecast. PCA has adjusted its 2016 U.S. cement consumption forecast down slightly, to 3.4 percent growth compared to its fall forecast of 5 percent. Growth projections for 2017 were also adjusted down. PCA expects 2017 cement consumption will grow at a rate of 4.3 percent, compared to 5.7 percent projected in the fall.
The new forecast reflects a deterioration in global growth conditions; an even weaker U.S. Energy Information Administration (EIA) projection for oil prices; a tightening in U.S. monetary policy; further strengthening of the dollar; slower employment growth; and a slower path of recovery in cement intensities. Finally, on the plus side, the new forecast reflects the implementation of the new multi-year highway bill, Fixing America’s Surface Transportation (FAST) Act. A multitude of factors, therefore, are responsible for the 160 basis point reduction in 2016 growth. Many of these factors remain in play for 2017 and are responsible for the 140 basis point reduction from the previous forecast. They will remain in play until the global headwinds ebb—beginning in 2018. It should be noted that there are a mix of risks to the forecast, but generally PCA believes the risks have shifted to the downside.