SKOKIE, Ill.—Experts predict cement consumption this year to increase more than five percent over 2004 levels, despite this year’s hurricanes. Residential construction is expected to decline due to raising mortgage rates in 2006; however, increases in commercial construction and public works construction will more than offset the residential slowdown and provide a net cement consumption gain in 2006.

Closely in line with its summer, pre-Katrina forecast, the Portland Cement Association (PCA) Fall 2005 Economic Forecast projects that more than 120 million metric tons of cement will be used in 2005, an increase of 5.2 percent from 2004, with consumption rising an additional 3.7 percent in 2006.

“This summer’s hurricanes served as a trigger point to start slightly slower economic growth,” Ed Sullivan, chief economist for PCA, said. “Higher home heating costs, rising inflation and rising interest rate levels will cause some construction slowdowns. Fortunately the re-building of the Gulf Coast, particularly New Orleans in the later half of 2006, will contribute to keeping cement consumption on track with earlier forecasts as will increases in public construction.”

According to Sullivan, although re-building New Orleans could consume 650,000 to 1.8 million tons of cement each year of an expected five-year process, additional imports will not be necessary to fill this need. “The slightly more adverse economic environment early in 2006 will act to neutralize the additional cement consumption anticipated from the post-Katrina rebuilding efforts.”

The U.S. is expected to import 33 million tons of cement in 2005, roughly 27 percent of the cement consumed. PCA’s fall forecast projects 2006 imports to reach 35 million tons, in-line with earlier, pre-Katrina estimates.

About the Fall Forecast 2005
PCA’s Fall Forecast begins with a macroeconomic look at the components of economic growth. Based on those factors, PCA evaluates the impact on construction, breaking down the public, nonresidential and residential sectors. The cement and concrete forecast is derived from construction sector assessments.

About PCA
Based in Skokie, Ill., the Portland Cement Association represents cement companies in the United States and Canada. It conducts market development, engineering, research, education, and public affairs programs.

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Note to editors: To obtain a copy of PCA’s Fall Forecast contact Patti Flesher at newsroom@cement.org.