Although the current economic outlook is not bullish, major economic expansion will be the trend in North America through 2030, Ed Sullivan, chief economist for the Portland Cement Association said at the recent World of Concrete convention in Las Vegas.
In the short term, Sullivan said the likelihood of recession appeared to be at least 50 percent. Sullivan predicted a soft level of consumption of cement in 2008, with a more significant decline in 2009. Sullivan predicted that a recovery in this area wouldn’t begin before 2010 or even later.
However, long term the picture is much brighter, Sullivan said.
“While we focus on that cyclical decline, keep in mind that in the long term this industry is very bright,” Sullivan said. “We look at growth in the context of population growth, in the context of demographic changes. The Bureau of Census expects the United States to add 65 million people by 2030, a dramatic increase. When you add people, you add demand for schools, you add demand for hospitals and outpatient clinics, you add demand for housing and retail developments to support these people, you add demand for infrastructure.”
Sullivan said that according to these demographic trends, over the next 25 years, 50 million new drivers will take to U.S. roads. “Just to maintain current congestion levels means that we are going to have to increase highways by 30 percent,” Sullivan added.
Sullivan said the relief of congestion was particularly important because congestion creates added economic costs. Commute times went from a monthly average of 14 hours to 38 hours, resulting in lost productivity for companies. Sullivan also discussed the environmental effects.
“Congestion is wasting 3 billion gallons of fuel per year and that translates into about 30 million metric tons per year,” Sullivan said. “And it’s going to get worse next year and worse the year after that. You have to look at the carbon dioxide emissions cumulatively because when you burn it into the atmosphere, it stays there for a very long time. So we expect an acceleration and commitment for increasing our highway infrastructure.”
Sullivan also predicts significant increases for the concrete industry because of the lower costs of building with concrete compared with wood frame, the insulation benefits and the benefits to the environment, concern for which will increase significantly in coming years.
