Concrete Products

JUL 2014

Concrete Products covers the issues that attract producers of ready mixed and manufactured concrete focusing on equipment and material technology, market development and management topics.

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20 • JuLY 2014 www.concreteproducts.com NEWS SCOPE MARKET OUTLOOK Construction employers added 6,000 workers in May as the industry's unemployment rate dropped to 8.6 percent, its lowest mid-spring level in six years, according to an Associated General Contractors of America analysis of federal government data. Employment gains remain spotty and thousands of highway con- struction jobs are at risk due to federal funding uncertainties, notes AGC Chief Economist Ken Simonson. "Even with fve straight months of construction employment gains, the industry remains vulnerable to sudden shifts in demand," he says. "Unless lawmakers act to head off an expected disruption in highway funding, the sudden loss of billions of dollars worth of demand would cost many construction workers, as well as workers from other segments of the economy, their jobs." Construction employment eclipsed 6 million in May, the highest total since June 2009 and an increase of 188,000 or 3.2 percent from a year earlier. Residential building employers added 3,300 jobs in May and 105,600 (4.9 percent) over 12 months. Nonresidential construction frms added 2,700 employees since April and 82,000 (2.2 percent) since May 2013. The unemployment rate for workers actively looking for jobs and last employed in construction declined from 10.8 percent a year earlier to 8.6 percent in May 2014—the lowest rate for the month since 2008. Unemployment among all con- struction workers had reached 20.1 percent in May 2010. AGC offcials urge Congress and the Obama administration to fnd a way to keep the federal Highway Trust Fund from running short of money, as forecast, later this summer. Disrupting payments from the Fund would compel many states to halt or cancel outright billions of dollars worth of highway projects during the middle of the busy construction season, they caution. "Forcing a sudden halt to thousands of projects across the coun- try will undermine much of the growth the construction industry has recently experienced," affrms AGC CEO Stephen Sandherr. "[It] would cost thousands of construction jobs and force commuters and shippers in many parts of the country to pay for the lost construc- tion season through pothole damages and shipping delays." PCA'S SULLIVAN FIRM ON 2014 GROWTH PROJECTION IN 8 PERCENT RANGE Although recent indicators point to a tempering of the U.S. econo- my, Portland Cement Association is maintaining its forecast for steady growth in construction and cement consumption during the next five years, starting with a projected 7.9 percent increase this year in powder shipments—nearly double the 4.5 percent increase the industry logged in 2013 over prior-year volume. "There is considerable evidence the economy's growth path has soft- ened during the past several months, but we believe underlying econom- ic fundamentals are stronger than the data suggest," affirms PCA Chief Economist Ed Sullivan. Real GDP weakened considerably to close out 2013, dropping from 4.1 to 2.6 percent in the third and fourth quarters, he adds, while preliminary first quarter 2014 estimates peg growth at a meager 0.1 percent. Consumer confidence has recorded setbacks, mort- gage applications have sustained weekly declines, the housing market has stalled, and real put-in-place construction activity has slowed. Sullivan traces the principal cause for the recent economic weak- ness to the unusually adverse weather conditions during the fourth quarter of 2013 and the first quarter of 2014. "[They] had an obvious impact on cement consumption—limiting construction and concrete use. North- ern states and much of the East Coast were hit hard, with year-over-year losses of as much as 25 percent. However, despite this drag, nation-wide cement recorded gains. Through the first quarter, cement consumption increased 4.5 percent compared to the same period in 2013." Economist links construction materials' upward pricing to harsh winter conditions Through April, concrete products and iron & steel prices were up 3.4 and 3.2 percent year over year, while overall construction materials prices rose 1.5 percent against the first four months of 2013, according to the U.S. Department of Labor's mid-May Producer Price Index. "Construction materials prices have increased for five consecutive months, the longest streak in more than two years," says Associated Builders and Contractors Chief Economist Anirban Basu. "While some may interpret this as the onset of a period associated with significantly higher inflation, it seems more likely that the consistent uptick in pric- es is at least partially attributable to the colder-than-normal winter, which interrupted the usual flow of construction inputs. Nationally, con- struction spending has not been rising in recent months, which implies increases in materials prices are not a purely economic phenomenon." Crude energy materials prices fell 3.3 percent in April, but are still 6.6 percent higher than one year ago. Natural gas prices decreased more than 10 percent for the second consecutive month. Overall, the nation's wholesale goods prices expanded 0.7 percent in April and are up 3.1 percent year over year. "The nationwide surge in prices is almost entirely attributable to food prices, which increased 2.7 percent in April alone," observes Basu. "Any crops that weren't damaged by the harsh winter are now struggling to survive through a drought affecting large portions of the western United States." AGC economist cautious as construction employment hits six-year high DELIVERING SUSTAINABLE SOLUTIONS After water, concrete is one of the most sustainable and widely used materials in the world. Fly ash plays an important role in increasing the sustainability of concrete. Headwaters Resources is the nation's leader in supplying quality fly ash. We can help you discover how to improve the performance of your concrete while simultaneously improving its environmental profile. Visit www.flyash.com for answers to the most common questions about fly ash. You can also contact your expert Headwaters Resources technical support representative for advice on your specific sustainability opportunities. www.flyash.com

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