Tag Archive for 'PCA'

2019 Will Be …

By Greg Sitek

Prospects for the coming year are positive. Inertia alone should keep the economy going and growing. So much has been put in motion that most of the influencing factors have not yet had a chance to take effect.

According to the Equipment Leasing & Finance Foundation A strong labor market and healthy consumer spending are positive factors, “Indeed, preliminary estimates of consumer spending on Black Friday and Cyber Monday reveal that online spending was up nearly 20% from last year, setting a record that underscores the current sentiment of U.S. consumers. Overall, recent data suggest that consumer spending should continue to drive economic growth in 2019.” The Foundation also points out that there are factors that have the potential of causing problems, most notably increased trade pressures and tightening of global credit.  You can find more of what the Foundation and other leading industry organizations predict for 2019 in the national section of this issue.

There are numerous organizations that have published forecast and other that will be published after the New Year has started. We will keep you informed on these as they become available.  Meanwhile here are glimpses into what a couple leading industry associations are forecasting.

ABC

Associated Builders and Contractors (ABC) Chief Economist Anirban Basu forecasts another strong year for construction sector performance, yet warns about inflationary pressures.

Job growth, high backlog, and healthy infrastructure investment all spell good news for the industry. However, historically low unemployment has created a construction workforce shortage of an estimated 500,000 positions, which is leading to increased compensation costs.

“U.S. economic performance has been brilliant of late. Sure, there has been a considerable volume of negativity regarding the propriety of tariffs, shifting immigration policy, etc., but the headline statistics make it clear that domestic economic performance is solid,” said Basu. “Nowhere is this more evident than the U.S. labor market. As of July, there were a record-setting 6.94 million job openings in the United States, and construction unemployment reached a low of 3.6 percent in October.”

While the U.S. economy is thriving, Basu cited the potential long-term impact of rising interest rates and materials prices—up 7.9 percent on a year-over-year basis in October—on the U.S. construction market. In addition, the workforce shortage will continue to influence the market in the coming year.

That said, Basu stressed that a recession is unlikely in 2019, even with recent financial market volatility. Indicators such as the Conference Board’s Leading Economic Index, which often signals an economic downturn, have continued to tick higher, implying current momentum will continue for at least two to three more quarters.

While optimistic for next year, Basu warned that “Contractors should be aware that recessions often follow within two years of peak confidence. The average contractor is likely to be quite busy in 2019, but beyond that, the outlook is quite murky.”

https://www.abc.org/News-Media/Newsline/entryid/15940/abc-predicts-construction-sector-will-remain-strong-in-2019

PCA Forecasts Less Growth in 2019 and 2020

The Portland Cement Association (PCA) Market Intelligence Group forecast for cement consumption over the next two years, shows less growth compared with 2018. This year’s rate of change is 2.9 percent. Growth ebbs to 2.6 percent in 2019 and to 1.6 percent in 2020.

“We are expecting relatively modest but sustained interest rate increases after 10 years of low and stable rates,” said PCA Senior Vice President and Chief Economist Ed Sullivan. “The Federal Reserve’s actions will gradually slow the construction sector’s growth due to, among other things, the higher mortgage rates for residential buildings and higher borrowing cost for nonresidential buildings.”

Sullivan added, “While the tax cuts passed at the end of 2017 have helped to boost the overall economy, the rising debt will frame the discussion of future federal public infrastructure spending.”

PCA’s overall projection for the U.S. economy suggests considerable strength that will take time to unravel. The seeds of a gradual softening will arise from rising interest rates, the emergence of fiscal difficulties at the state level at a time of relative prosperity, and the aging of the recovery. PCA forecasts the GDP growth rate to be 3.1 percent this year, 2.7 percent in 2019 and 2.2 percent in 2020. The unemployment rate now below 4 percent, is expected to trend down – intensifying labor shortages and leading to stronger wage gains.

“America’s economy is unquestionably strong and resilient,” said Sullivan. “The real GDP growth is healthy, wage growth is up, and both the unemployment rate and consumer household debt are at near record lows. While interest rates are rising, they have not reached a threshold that would cause a significant adjustment to the positive overall growth projections.” https://www.cement.org/newsroom/2018/11/15/pca-forecasts-less-growth-in-2019-and-2020

Have a happy and prosperous New Year.

Portland Cement Association’s Spring Cement Outlook

Spring Cement Outlook Spring Cement Outlook2

MIT Research Points to Importance of Road Design in Fuel Consumption

PCA LogopRecently President Barak Obama announced plans to introduce a rule for higher fuel efficiency standards for medium and heavy-duty trucks by 2016. At an appearance at a grocery distribution center in Upper Marlboro, Md., President Obama charged Department of Transportation Secretary Anthony Foxx and U.S. EPA Administrator Gina McCarthy to “develop fuel economy standards for heavy-duty trucks that will take us well into the next decade.”

According to the White House, heavy-duty trucks account for just four percent of highway vehicles, but are responsible for 20 percent of carbon pollution from the transportation sector. Current fuel-economy standards are aimed at reducing truck fuel use by as much as 20 percent.

Gregory M. Scott, president and CEO of the Portland Cement Association, said it is time to not only look at the efficiency of cars and trucks on the road, but to look at the actual road for fuel economy and emission reductions.

“We should expand the debate beyond making more efficient cars and trucks to making more efficient infrastructure. Stiffer pavements – such as pavements made from concrete — produce less rolling resistance and better fuel economy,” Scott said.

Researchers at the MIT Concrete Sustainability Hub recently found that how the road is constructed could have a significant impact on the fuel economy of cars and trucks. Research models predict the use of stiffer pavements, for example, could reduce fuel use by as much as three percent, a savings that would add up to 273 million barrels of crude oil per year.

Florida International University tested MIT’s research models in real-world conditions with similar results. They studied vehicles traveling on I-95 and found that riding on rigid pavements consumes 3.2 percent less fuel than riding on flexible pavements for passenger vehicles and 4.5 percent less fuel for loaded tractor-trailers. If all Florida pavements were rigid, it could amount to an annual fuel savings of more than $2 billion for highway users.

About PC

Based in Washington D.C. with offices in Skokie, Ill., the Portland Cement Association represents cement manufacturing companies in the United States. It conducts market development, engineering, research, education, and public affairs programs. More information on PCA programs is available at www.cement.org.

PCA Reports: Rebuilding Right Saves Lives, Resources

PCAHigher Building Standards Aligned with Goals of Obama’s Climate Action Plan

Hurricane Sandy batters the Jersey shore; a tornado rips through Oklahoma; wildfires destroy forest in Arizona. All these major disasters have happened within the last year and caused billions in damages. In 2012 alone, 47 states received federal major disaster declarations, triggering a use of federal funds for relief efforts.

When a federal disaster is declared following an extreme event, taxpayers’ dollars are often used to help rebuild communities and cities around the country. An initiative is underway nationwide asking communities to not just rebuild, but to build back better.

The Portland Cement Association (PCA) and others in the concrete industry are urging the enactment of H.R. 2241, the Disaster Savings and Resilient Construction Act of 2013. The bill provides a tax credit to business or home owners who rebuild in local regions that were declared federal disaster areas.

These efforts are also aligned with President Obamas recently announced

“Climate Action Plan.” The plan calls for the National Institute of Standards and Technology to convene a panel on disaster-resilience standards to develop a comprehensive, community-based resilience framework and provide guidelines for consistently safe buildings and infrastructure – products that can inform the development of private-sector standards and codes.

“By enacting higher building standards, cities and towns can successfully weather any challenge and keep friends and family safe,” Greg Scott, PCA president and CEO, said. “The nation spends billions of dollars each year for relief packages, and in this challenging economic climate, communities cannot afford to completely rebuild each time a disaster strikes. By utilizing resilient construction techniques, the built environment is protected from the increasing number and severity of natural or man-made disasters.”

Additional benefits to homeowners can also apply as, in many cases, a resilient home will also be an energy efficient one.

PCA also is supporting research at the MIT Concrete Sustainability Hub to help designers and builders quantify the physical resilience of residential structures as a portion of the overall systems concept of resilience. Comparing this performance against costs will facilitate communication of the cost and performance trade-offs of alternative designs.

The public can write their Member of Congress to co-sponsor H.R. 2241, the

Disaster Savings and Resilient Construction Act of 2013 by visiting

http://www.bipac.net/issue_alert.asp?g=PCA&issue=Resiliency&parent=PCA.

About PCA

Based in Washington, D.C., with offices 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.

PCA Reports: Cement Consumption Will Rise or Fall Based on Timing of Resolution

Although cement consumption and overall U.S. construction activity increased significantly more than expected in 2012, these gains would be immediately erased in 2013 if the fiscal cliff is not resolved in a timely manner.

A forecast from the Portland Cement Association (PCA) expects a 7.5 percent jump in cement consumption in 2012, up 50 basis points from its summer forecast. However, the instability of the political landscape makes projecting 2013 consumption more challenging.

The “fiscal cliff” came about from dual economic objectives reflecting the need to inject fiscal stimulus into an inert economy and the need to deal with burgeoning federal debt. Packaged together as the Budget Control Act of 2011, tax increases of $400 billion coupled with $200 billion in federal spending cuts are scheduled to go into effect January 1, 2013.

If Congress resolves the fiscal cliff during its lame duck session in 2012, PCA expects the economy to continue to grow and cement consumption in 2013 to increase 6 percent. Adversely, even if Congress addresses the policies by the first quarter of 2013, this delay will cause significant economic harm and cause a 2.7 drop in cement consumption.

“Because we believe the odds for either outcome are even, we have adopted a forecasting approach that minimizes up and downside risk,” Ed Sullivan, PCA chief economist said. “Our baseline scenario blends the two possible outcomes and projects a 1.8 percent increase in cement consumption in 2013.”

Sullivan also reported that the longer Congress delays in addressing the fiscal cliff, the greater the adverse affect on economic growth and construction activity in particular. “If no action is taken by mid-2013, the country could be headed into a severe recession.”

According to the PCA report, cement consumption through September 2012 had increased 10 percent compared to last year, with 16 consecutive months of growth. Sullivan attributes this growth to the return of consumer confidence, a strong housing market, and most importantly, growth in employment.

About PCA

The Portland Cement Association, based in Skokie, Ill., represents cement companies in the United States and Canada. It conducts market development, engineering, research, education, and public affairs programs. For additional information, visit www.cement.org.