PCA sees US residential dip

The Portland Cement Association's (PCA's) Economic Research department says the US residential construction market will weaken in the second half of the year. The group says this will lead to reduced growth in the cement market.

According to PCA chief economist Ed Sullivan, emerging weakness in the residential construction sector will counteract the strong growth seen in parts of the US earlier in 2006. “In July, 24 states showed significant declines in housing permit activity, including traditionally strong markets such as Nevada, Florida, and Arizona. I do not believe these declines will be temporary trend,” Mr Sullivan said.

The decline in residential building was expected. However, according to Mr Sullivan, the non-residential and public construction sectors are not growing at the rates predicted earlier in the year. “Underlying drivers for the non-residential sector are improving, but at a slower rate,” said Mr Sullivan.

According to the PCA, cement use in the US was up +5.6% in the seven months to the end of July, compared to 2005 levels. The association's latest projections indicate that second half weakness in residential construction will push overall growth for 2006 lower to +2.3% and to +1.2% in 2007.