The Portland Cement Association's (PCA's) summer forecast for the US cement and construction industries says there will be a -7% decline in construction activity in 2009, following on from this year's -9% contraction. This is a downgrade of its previous forecast, and the association is warning that the current recession will be more sever than the last two the US has faced (in 2001 and 1991).

In terms of US cement consumption, the PCA is expecting a -12% decline this year, followed by a -6% fall in 2009. Measuring the difference between the peak of the boom and the deepest point of the trough, the PCA says this represents a -22,5% decline in consumption. Although the industry has seen worse downturns in percentage terms, this drop in volume of -27,6 tonnes of cement will be the biggest downturn the industry has seen in absolute terms.

The PCA pins the blame on high oil and energy prices, the weak US Dollar and high inflation, which will see the downturn in residential construction spread to the public and non-residential construction sectors in 2009. In addition, with a high number of homes standing empty in the US, and tight credit conditions remaining in place, the previously forecast late-2009 recovery in house building is expected to be delayed.

The PCA expects a -12% fall in house prices this year, with a further -9% decline in 2009. It says that although house sales may pick-up again by late 2008, the high inventory of unsold properties means the number of housing starts will not begin to rise again until 2010.

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