The downward revision comes on the back of bad weather and lower anticipated budgets in the public construction sector.
According to Ed Sullivan, the PCA’s Senior Vice President and Chief Economist, stronger growth is anticipated – but not until mid-2019.
“Once infrastructure and tax reform initiatives take hold and affect economic construction activity, then we can expect growth in cement consumption to accelerate to higher levels,” said Sullivan.
The forecast assumes the successful passage of tax reform, as well as a US$250 billion national infrastructure programme. These dual fiscal stimuli will accelerate GDP growth, construction spending, and cement consumption.
However, with unemployment also expected to lower than today’s levels, the stimuli measures will add to inflationary pressure, continued Sullivan, adding to the risk of a larger-than-expected increase in interest rates.
“Construction is an interest sensitive sector,” Sullivan concluded. “A slowdown and perhaps a decline in activity is expected, beginning in late 2021.”
