Portland Cement Association (PCA) Senior Vice President and Chief Economist Ed Sullivan warned about the potential for a dip in cement consumption and concrete output attributable to the Russia-Ukraine conflict.
At NRMCA’s 2022 Annual Convention and PCA Spring Committee Meetings in San Antonio in March, the following three scenarios were presented for U.S. shipments through 2024:
• War. Conflict expands beyond Ukraine borders; against 2021 cement consumption levels (up 4.1% from prior year), shipments decline 0.8% and 5.8% in 2022-2023, but rebound with a 2.3% gain in 2024.
• Baseline. Conflict is confined to Ukraine borders; cement demand holds for 1.2% increase in 2022, drops 0.8% next year, and rebounds with a 2.0% gain in 2024.
• Everything Works. Diplomatic solution to conflict; 2022-2024 cement shipments climb 3.0%, 2.8% and 3.3%, respectively.
The scenarios would equate to U.S. powder consumption ranging from about 108 million metric tons to just over 120 million metric tons annually over the three-year window. Beyond the Ukraine factor, Sullivan underscored other developments shaping near-term cement demand: Continued decline of COVID-19 infection and death rates; residential market softening, with 2022 growth projected at 8 percent, half that of 2021, and subsiding the next two years; gradual escalation of Infrastructure Investment and Jobs Act transportation funding, especially for 2023-2024; and, continued caution surrounding non-residential building, especially retail properties.
Geopolitical matters, federal monetary policy and labor markets, moreover, compelled his conclusion: “There is so much risk in this forecast.”
Link to original article