Portland cement consumption is forecast to increase by 0.3% this year to 105.5 million mt, another new record level of activity, according to Portland Cement Association Chief Economist William Toal. In 2002, consumption is expected to rise 1.6% to 107.2 million mt. Increases of about 2% per year are forecast through 2005.

“This long economic and construction expansion has been very positive for the U.S. cement industry,” said Toal in his recently revised forecast. “Portland cement consumption reached new record levels of activity in 1994 and has surpassed it in each year since. The industry's capacity utilization rate is currently running in the high 90% range.

“[However,] the onslaught of an early winter late last year resulted in significant declines in construction and cement consumption in November and December. Portland cement consumption finished the year with a 1% increase from the prior year. The increase would have been significantly better if not for the year-end weather.

“Mild weather in January boosted cement consumption, but the return of winter in February resulted in a major drop of activity.”

While construction activity is forecast to be essentially flat this year and next, the outlook for cement consumption, says Toal, is slightly more positive for two reasons, 1) while overall construction is forecast to be flat, the more cement intensive areas of public construction are projected to post sizable increases; 2) over the past 10 years, there has been a noticeable increase in the ratio of cement consumption to construction activity. Increases in the usage of cement per dollar of construction activity have occurred in the residential, some areas of nonresidential, and in public works areas of construction.

As new U.S. capacity comes on stream, imports will decline, says Toal. Imports already have started to decrease, down 2.3% in 2000. A 16.2% drop is expected this year to 24 million mt, with an additional decline to 20 million mt in 2002.