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The US
Cement
Market:
Does Form
Follow
Function?
Raluca Cercel, CW Group,
discusses the
predictions for the future of the US cement
and construction industries.
Introduction
Political instability has filtered its way into seemingly all aspects of the US economy.
Although a first look at the country’s economy and construction sector may give
solid reasons for this bullish perspective, the underlying reality is that lowering
productivity, trade wars with neighbouring countries, and market volatility (which
has already been abundant in 2018) are risks that are likely to counterbalance
consumers’ and businesses’ chipper attitude in the aftermath of tax cuts. Not to say
that we are looking at a recession, but all signs do point to an imminent slowdown.
In its most recent World Economic Outlook, the International Monetary
Fund (IMF) expects the economy to be stimulated by investors’ response to
the corporate income tax, but the temporary nature of some of the package’s
provisions will mean the renewed growth is only an economic sweet spot, and
not the new normal.
The construction sector, after a rather lackluster 2017 in terms of public works,
might reap the fruits of the tax bill, but growth is reserved for the few and not
for the many. It is worthwhile to do a quick run through the evolution of the US
construction sector. Construction (at a seasonally adjusted annual rate) increased
at a CAGR of around 13% in the 2014 − 2017 period, to a total of US$1.438 billion,
out of which 42% alone came from residential construction. The residential sector
grew at a CAGR of more than 17% in the same period, a much quicker rate than