U.S. Economy, Tax Reform, Infrastructure Key to Demand, PCA’s Sullivan Says

Jan. 25, 2018

2 min read

Economic momentum supported by tax reform and possible federal infrastructure programs will play key roles in the demand for concrete construction in the coming years, said one of the construction industry’s leading economists Ed Sullivan, senior vice president and chief economist of the Portland Cement Association at the World of Concrete in Las Vegas yesterday. However, Sullivan cautioned that there are potential stumbling blocks in the road ahead despite fairly upbeat expectations for cement production and concrete construction.

Sullivan said the strong economy comes in the context of continued difficulty in finding skilled workers, including those needed for construction projects. Weather conditions and other economic factors prompted PCA to revise its 2017 fall forecast down slightly, although its fundamental assessments pertaining to the economy, construction markets and cement consumption remain on target.

“There is little doubt that the near-term outlook for construction and cement consumption in 2018 and 2019 remain favorable,” Sullivan said. “Strengthening economic conditions, with the addition of fiscal stimulus, and in the context of already low unemployment could awaken inflationary pressures. Down the road, this could lead to an even more stringent monetary policy, leading to an acceleration in interest rate increases, and an eventual cooling of construction markets. If this scenario plays out, it will likely take time to gestate and not materialize to a significant degree until after 2019.”

The PCA Spring Forecast will be released by PCA during the first week of March. PCA’s Market Intelligence Group forecasts are highly respected by construction industry executives to understand the direction the United States economy is headed, and how the information impacts their business.

Sullivan added that the lack of clarity from the Trump Administration clouds the focus regarding federal infrastructure spending.

For more information, including other PCA market intelligence forecasts, go to www.cement.org/economics.

About the Author

Michael Roth

Editor

Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.