Aggregate Forecast: Looking to 2022 and beyond

By |  October 26, 2021
 Photo: P&Q Staff

David Chereb contends that aggregate demand is mixed regionally, with the South, West and Energy states experiencing the fastest growth. Photo: P&Q Staff

A national headline in the very near future could read something like this: “COVID pandemic over for U.S.”

If this turns out to be the case by the end of 2021, then 2022 will be a great growth year for the U.S. With the growth of vaccine options and now the availability of treatment protocols for the unvaccinated, economic restrictions should be gone by mid-2022.

Still, we are not ready for rapid GDP growth beyond 2021 because we have supply chain bottlenecks scattered throughout the economy.

To an economist, supply bottlenecks mean prices are misaligned. To an operations manager, they mean someone didn’t order enough parts. To a consumer, they mean higher prices (i.e., inflation).

Market analysis

By construction market segment, the strongest one is currently residential. This sector remains strong and is still trying to catch up to high demand. The rapid increase in prices is now operating to constrain transactions.

 Source: David Chereb Group

Click to enlarge | Source: David Chereb Group

At the low end, builders cannot construct low-cost housing due to high raw materials costs, government restrictions and labor shortages. At the high end, some buyers are now having more trouble qualifying for high mortgages.

But because demand is so high, residential will consume more aggregate both this year and in 2022 – up 22 percent in 2021 and another 1.4 percent next year.

The nonresidential segment, meanwhile, will be flat for another year. There are areas of strength such as warehouses, education and manufacturing. These are also the sub-segment areas that will provide growth for 2022 and beyond.

Lastly, all areas of nonbuilding are doing well in 2021 and will continue to do so until at least 2024. Funding will increase with or without a new congressional budget. Of course, the increase will be much stronger if Congress passes an infrastructure bill.

Regionally, demand is mixed as usual, with the South, West and Energy states growing the fastest. Aggregate pricing strength is present in most areas and will be even better in 2022.

David Chereb, Ph.D., is with David Chereb Group (DCG), which produces customized market forecasts by major segment of construction, from the county level up. Clients use DCG market intelligence reports for business planning and acquisition analyses in aggregate, ready-mixed concrete and cement. Visit for more information.

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