PCA predicts three drivers of 2018 construction demand

Ed Sullivan, the Portland Cement Association’s (PCA) senior vice president and chief economist, expects economic momentum supported by tax reform and federal infrastructure programs to play a key role in the demand for concrete construction in the years ahead.

During a press conference at the 2018 World of Concrete in Las Vegas, Sullivan went over the association’s upcoming spring forecast for cement production and concrete construction.

Sullivan says the strong economy comes in context of continued strain to find skilled workers, including those needed for construction projects. Weather conditions and other economic factors prompted PCA to revise its 2017 Fall Forecast down slightly, though its fundamental assessments pertaining to the economy, construction markets and cement consumption remain on target.

“There is little doubt that the near-term outlook for construction and cement consumption in 2018 and 2019 remain favorable,” Sullivan says.  “Strengthening economic conditions, with the addition of fiscal stimulus, and in the context of already low unemployment could awaken inflationary pressures.” 

Sullivan says this could potentially lead to more stringent monetary policy, leading to an acceleration in interest rate increases and an eventual cooling in the construction markets.

“If this scenario plays out, it will likely take time to gestate and not materialize to a significant degree until after 2019,” Sullivan says.

The PCA Spring Forecast will be released during the first week of March 2018, according to the association.

PCA’s Market Intelligence Group forecasts are used by construction industry executives to understand the direction America’s economy is headed, which in turn impacts their businesses.