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February 13, 2007 1:30 PM CST

Continued Commercial Construction Growth Forecasted for 2007


Sustained growth in the commercial and public sectors is expected to boost cement consumption in 2007 and 2008. The most recent forecast from the Portland Cement Association (PCA) predicts a 7.6 percent consumption increase in 2007 for nonresidential and a 4.4 percent jump in public sector.
Leading nonresidential markets will be industrial, hotel/motel and office. Military and public security construction is expected to contribute the most growth in the public sector.

Edward J. Sullivan, PCA chief economist, anticipates the increase in nonresidential and public markets to be key to overall increases in cement intensities for the next two years. "Because of the relative pricing position of concrete to competing building materials — particularly asphalt, which has recently posted 33 percent price increases — cement intensities are expected to grow by 2 percent in 2007, even when overall consumption is relatively flat."

A modest overall cement consumption of 0.3 percent is forecasted for 2007, with a stronger increase of 2.7 percent in 2008. Cement intensities refers to the tons of cement per dollar of construction activity.

However, Sullivan does not predict cement consumption growth to be shared evenly across the United States. The Great Lakes, Northeast and Middle Atlantic states are expected to face meager growth conditions and possibility contraction in some markets.

"We see the real growth occurring in the South, West and Mountain regions," Sullivan said. "This is reflective of the relative strength in the regional economies as well as each state's exposure to declines in residential construction."

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