Cement manufactures see little chance of a turnaround in the hosing market anytime before summer, 2009, according to a new research report from the Portland Cement Assocation, based in Skokie, Ill.
The report predicts "significant declines" in U.S. construction activity this year, with consumption of Portland cement expected to drop 10% in 2008 and another 3.6% in 2009. Total 2008 cement consumption is predicted to be 102.7 million metric tons.
"High fuel prices, acceleration of home foreclosures, and the impact of the subprime crisis on credit standards are some of the current conditions that lead us to believe the economy is already in a recession," said Edward Sullivan, PCA chief economist. "Even when there is recovery later this year, it will not immediately affect the construction and cement industries."
Sullivan anticipates high home inventory levels to depress the residential sector until second half of 2009, causing a 26.5% decline in housing starts for 2008. The nonresidential sector, which is closely tied to economic activity, will fall 7%, the PCA predicts.