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FEATURE FORECAST 2012 RECOVERY PUSHED TO 2014… FORECAST 2012 BY STEVE PROKOPY ery, according to the latest forecast from PCA Chief Economist Edward Sullivan. Even with an economic re- covery, construction levels will remain at new floor lev- els and lead to relatively flat cement consumption until 2014, said PCA, which revised its cement consumption forecast to increases of 1.1 percent in 2011, 0.5 per- cent in 2012 and 7.4 percent in 2013—roughly half of the previous forecast. According to Sullivan's report, large structural issues exist in each construction sector that will slow recovery. "The Great Recession was construction focused. Res- J idential, nonresidential and state discretionary con- struction levels collapsed," said Sullivan. "Despite economic growth, the residential sector, for example, will continue to be plagued by a large volume of fore- closures, tight lending standards and weak new home prices. I don't see a rebound in most of that market until 2014." Sullivan adds that nonresidential construc- tion will also remain low until 2013, and lack of assured federal funding will drag down the public sector until 2014 as well. Recovery for the construction industry is tied to gen- eral economic growth and job creation, Sullivan added. Job creation will reduce, and eventually eliminate, the adverse impacts of foreclosures, tight lending stan- dards, commercial occupancy and leasing rates, as well as the severity of state fiscal conditions. However, be- cause the impediments to a construction recovery are so large, even if an acceleration in economic growth and job creation occurs on a sustained basis, the ben- efits will not materialize quickly. The slower economic growth outlook may carry only small downside risk, but it will impact the timing 10 PHOTOS: of the construction recovery, Sullivan maintains. The timing of the construction and cement market recov- eries has been pushed back. In PCA's previous fore- cast, a residential recovery was expected to begin during the second half of 2013. While the residential recovery will begin at different times depending on the region of the country, a significant residential re- covery is not expected to begin until 2014. The be- CEMENT AMERICAS • November/December 2011 • www.cementamericas.com ob creation is key to improving many economic in- dicators, and its reduction translates into a longer wait for cement and construction industry recov- S L OW E CONT I MP NUETU L O F Y D R UMP UCONS ME UNCE NT GROWT E ST R T A ON NUMB AI F HY TE O , FO NT THE C I D T I RM TN E MI NI H O H E RS E B TIODC E S E U CT D ACKD STRXP E GOVE N FOR NE IN RNME ROP DU STR NT FOR CURRE , FUND I NG AND A NT Y WO Y W XT ITH F T E ANDT L ARS . C oncr e t e Pr oduct s