The Portland Cement Association’s (PCA) Market Intelligence Group released cement consumption and real put-in-place construction spending forecasts for the Northeast, Central, West and Southeast.
Northeast
According to PCA, COVID-19 hit the Northeast hard and led to cement consumption declining by a projected 0.6 percent in 2020. PCA projects further decline in 2021 by nearly 1 percent.
The Middle Atlantic was down nearly 4 percent in 2020, but the East North Central and New England were up 0.7 percent and 2.8 percent, respectively.
PCA expects cement consumption in the Northeast to decline by 0.9 percent in 2021. The declines are evenly spread over the three census divisions, with the Middle Atlantic down 1 percent, East North Central down 0.8 percent, and New England down 0.8 percent.
According to PCA, the residential market served as the primary growth engine of 2020 in the Northeast. This is expected to fall off slightly in 2021, but again continue its growth in 2022 and throughout the forecast horizon.
PCA expects the commercial market to decline further in 2021 and 2022, as there have been many business closures and other economic scarring due to COVID-19. The association expects the commercial market to begin recovering in 2023 and grow through 2025.
In the Middle Atlantic, public cement consumption is projected to decline 0.4 percent in 2021 on top of a 1.9 percent decline in 2020. The Northeast is generally expected to lag behind national trends in public cement consumption given state fiscal conditions and the characteristics of the region, PCA says.
Southeast
Cement consumption in the South Atlantic census division ends in the positive territory amid the COVID-19 crisis thanks to positive in-migration fueling housing constructions, PCA says. Riding on the back of this trend, PCA expects cement consumption to grow by 3 percent in 2021.
While new home construction will be doing the heavy lifting, projects supporting new housing developments – namely water, sewer and local roads – will also add to cement consumption in the region. Warehouse construction will contribute to higher cement consumption as e-tailers continue to adopt a “just-in-case” strategy, PCA adds.
Demand in the East South Central census division is also expected to be positive. Led by strong in-migration to Alabama and Tennessee and robust new home construction, consumption will increase by 3.7 percent in 2021. The oil and gas sector in Alabama will likely contribute to the strength as prices climb back from the 2020 low. Also, demand from the logistics and distribution sector in Tennessee will drive cement consumption.
West
After a flat market in the Pacific region in 2020, PCA expects cement consumption will grow 0.9 percent in 2021.
The Pacific was among the hardest hit by the impacts of COVID-19, with Washington and the San Francisco Bay Area not exempting all forms of construction in the spring. California finished the year with growth, while Washington – despite strong gains in the second half of the year – saw a decline in cement consumption last year. Oregon had recorded double-digit gains in cement consumption in four of the five years going into 2020, but PCA says it saw a steep decline as cement intensities normalized.
Near-term growth in the region is projected to be driven primarily by residential construction.
According to PCA, the Mountain region led the U.S. in growth last year at about 10 percent. The region has healthy underlying economic fundamentals and favorable demographic trends, the association adds.
Utah and Idaho have seen some of the quickest rebounds in employment since the beginning of the pandemic, with each state in excess of 92 percent of total jobs recovered. There are areas of concern, though, with Nevada’s high exposure to leisure and hospitality and New Mexico and Wyoming’s reliance on oil.
PCA expects the region to decline 1.3 percent in 2021 as the commercial and public sectors are forecasted to turn negative, while the robust housing market continues to grow.
Central
After a slight 2020 decline in the West South Central census division, PCA expects cement consumption to grow 2.9 percent in 2021.
COVID-related construction disruptions were much more muted in the interior U.S. in relation to many coastal states, PCA says. The regional decline last year was largely attributed to weakness in oil well cement demand on account of the substantial decline in drilling activity.
Excluding oil well cement, construction-related cement consumption grew 3.1 percent in 2020. Near-term growth is expected to be driven primarily by residential construction, as well as slow, but steady, recovery in oil well cement demand and continued support from the public sector.
West North Central census division cement demand is expected to be flat for 2021 following an expansion of 7.2 percent in the previous year. The strong growth was fueled by a mix a of residential and government-related demand, PCA says, while agriculture and commercial cement demand was a drag in 2020.
North Dakota was the only regional state to experience a decline in demand last year, largely due to weakness in energy exploration and production. Despite the lack of growth, PCA says the region is expected to maintain levels of cement demand not seen since 2006.
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February 12, 2021 at 10:13PM
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PCA offers regional cement consumption forecasts - Pit & Quarry magazine
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