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NORTH AMERICA
According to the
Financial Post
, average
household disposable income has risen,
despite hundreds of thousands of job losses,
as consumers cut back on spending and
benefit from the Canada Emergency Response
Benefit (CERB). Data from May even shows
the Canadian economy adding 290 000 new
jobs, marking the best month-on-month gain in
45 years, and equivalent to roughly 10% of the
total jobs lost to date.
The Cement Association of Canada
recently released a declaration calling on the
government to prioritise construction and
spending to boost the country’s economic
recovery. Michael McSweeney, President
and CEO of the Cement Association of
Canada said: “A successful economic
recovery will require a commitment to use
time-sensitive infrastructure spending. We
have a very short construction season in
Canada and municipalities have lost much
of their financial capacity to fund important
infrastructure projects this year. We need
the federal government to help municipalities
get local community infrastructure projects
going to boost economic activity and public
confidence.” As part of the declaration, entitled
‘Building a Successful Economic Recovery
in Canada’, the industry put forward a seven
point plan detailing how the government
could maximise the utility of the cement and
construction sectors in supporting economic
recovery.
At the time of writing, the United States has
suffered heavily at the hands of the pandemic
with 115 000 recorded deaths at the time of
writing – more than any other country. After
a record-breaking 128 consecutive months
of growth, the country has also now officially
entered its first recession since 2009 with
more than 40 million unemployment claims
recorded by late May. Nonprofit group, The
National Bureau of Economy Research,
released a statement saying that “The
committee recognises that the pandemic and
the public health response have resulted in
a downturn with different characteristics and
dynamics than prior recessions. Nonetheless,
it concluded that the unprecedented magnitude
of the decline in employment and production,
and its broad reach across the entire economy,
warrants the designation of this episode
as a recession, even if it turns out to be
briefer than earlier contractions.” Despite
expectations of a particularly deep recession,
it is also predicted to be short-lived as states
emerge from lockdown and economic activity
resumes. Indeed, there are some arguments
to suggest that the recession has already
technically ended. A survey conducted by
Bloomberg shows that economists expect the
US economy to contract by 9.7% in the second
quarter and then by 6.8% in the third quarter
compared to figures for 2019.
According to Dariana Tani, Economist at
GlobalData, the US construction sector is
expected to see a decline in output of 6.5%
this year. Tani added: “Even though in most
parts of the US and Canada all construction
sites are allowed to carry on with their
operations, an increasing number of projects in
the bidding or final planning stages are being
delayed or cancelled due to the uncertainty
surrounding the economy as well as concerns
that construction workers are being exposed to
the virus.”
Whilst much of the US economy is expected
to recover fairly swiftly once lockdown
measures are eased, the construction
sector is likely to lag behind, according
to Ken Simonson, Chief Economist of the
Associated Contractors of America. A survey
conducted by the association found that 67%
of firms reported a project being cancelled or
delayed since early March. Simonson stated
that the 975 000 construction jobs lost as of
early May accounted for almost 13% of the
sector’s total workforce and represented one
of the sharpest declines on record. “As the
economy opens up, other industries will be
way ahead of construction, unfortunately,”
added Simonson. “Many firms are going to find
customers they are counting on have either
closed up shop or [say] ‘we no longer see the
need to open a restaurant in our chain,’ or a
state or local government will say, ‘we have
a lot of unbudgeted expenditures, we have a
balanced budget requirement, our revenue is
way down, so we have to put off building that
new school that we had in our capital budget
for next year.’”
In the first quarter of 2020, Mexico suffered
its worst monthly economic contraction in
over a decade, with GDP falling by 1.6%
month-on-month, slightly worse than the
1.4% that had been broadly anticipated.
Overall economic activity for the year is due
to fall by 6.7% as the country deals with the
combined impacts of the pandemic and a
slump in oil prices. Some forecasts, such as
that by BBVA Bancomer, predict a decline
of as much as 12% and place the blame on
President Andres Manuel Lopez Obrador’s
refusal to spend on an economic recovery
plan. Lopez Obrador, who had promised
annual economic growth of 4% under his
government, has said that the government
was still supporting small businesses with
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World Cement
World Review 2020