Cement demand to grow

By 2030 the U.S. population is expected to reach 363.5 million persons. Supplying the needed housing, buildings and roads will lead to a 43 percent growth in U.S. cement consumption by that year. According to Edward J. Sullivan, chief economist for the Portland Cement Association, annual cement consumption will hit 183 million metric tons, reflecting a 55 million-metric-ton increase compared to the past cyclical peak level in 2005. "Sixty-three million more people will be living in the United States in 2030 and they will need homes, schools, hospitals, and roads. This construction will boost demand for cement to record levels." While 50 percent of the rise in cement consumption is due to population growth, the remaining half will be driven by per capita cement consumption. One sector that Sullivan predicts will incur large growth is highway construction. Today, this segment accounts for 30 percent of total annual cement consumption. To meet the demand of the expected additional 49 million drivers, at least 400,000 additional lane miles of highway must be added by 2030. Efforts to reduce congestion and "wasted" fuel and its associated emissions could further increase the number of miles. Additionally, energy and environmental concerns are predicted to boost cement intensities, the tons of cement per dollar of construction activity. For example, houses built with insulating concrete form walls (ICFs) can require up to 44 percent less energy to heat and 32 percent less energy to cool than comparable frame homes. As more homeowners and builders seek energy efficient houses, the insulated concrete wall market share is expected to increase to 30 percent all new homes, compared to its seven percent share today. Your comment?

Oldcastle tops sand and gravel list

The U.S. Geological Survey (USGS) released its annual ranking of the nation's top producers of construction sand and gravel for 2006, and Oldcastle Materials again is the leader. In order, the following nine are Hanson; Rinker Materials Corp. (now Cemex Inc.); Vulcan Materials Co.; MDU Resources Group Inc.; Holcim/Aggregates Industries Inc.; Cemex Inc.; Martin Marietta Aggregates; Lafarge; and Granite Construction Inc. The list, published annually, runs two years behind the actual calendar. The No. 1 producing plant in the U.S. in 2006 was A. Teichert & Son Inc.'s Perkins Plant in Sacramento County, Calif. USGS reported that 3,974 companies with 6,294 active operations and 61 sales/distribution yards produced a total of 1.32 billion metric tons of construction sand and gravel valued at $8.5 billion in 2006. Most of the construction sand and gravel came from operations with outputs larger than 200,000 metric tons per year; 1,949 operations, representing 31 percent of all operations, produced 80 percent of the total tonnage. The 10 leading producing states were, in descending order of tonnage, California, Texas, Arizona, Michigan, Minnesota, Washington, Colorado, Ohio, Nevada and Florida. Their combined production accounted for about 51 percent of the U.S. total. The 10 leading sand and gravel companies accounted for 24 percent of the total. Your comment?

Think green

By the year 2030, the U.S. population is expected to grow by 63 million—resulting in an increased demand for housing, buildings and roads. Yet, at the same time, our society is struggling to balance these construction needs today with critical environmental priorities. As part of its ongoing commitment to sustainability, the Portland Cement Association has announced an initiative to recognize public officials who take the lead in “green” building. The annual “Sustainable Leadership Awards” will honor government leaders who advance sustainable development in their communities through the use of concrete and cement-based products. PCA encourages all members of the concrete industry to submit nominations. Your comment?

Fatalities in 2007

MSHA statistics reveal that in 2007 in the metal/nonmetal sector, there was 31 fatalities. That is up from 2006 when there was 26, but down from 2005 when there was 35. Nineteen percent of the fatalities occurred in the sand and gravel sector, while 16 percent occurred in crushed stone. Those working in maintenance and operating mobile equipment were involved in the largest number of fatalities. Your comment?

Report confirms infrastructure needs

NSSGA has commended the National Surface Transportation Policy and Revenue Study Commission on today's release of its comprehensive report—confirming the burgeoning needs of the nation's surface transportation infrastructure and the essential of increased investment to meet those needs—beginning the debate on the future of the nation's surface transportation infrastructure and how it will be funded.  While not in total agreement on the methods of raising additional revenues or how to spend increased funds, the commission agreed on the imperative of increased funding.

Commenting on the report, Michael Stanczak, regional president for Hanson Material Service and chairman of the NSSGA Reauthorization Task Force said, "The commission report reflects many of the recommendations of NSSGA's Reauthorization Task Force.  This includes the need for a new vision of transportation in the 21st Century, a multi-modal system that employs technological advances to increase efficiency of the system and the need for more research to continue advances to ease the congestion clogging our urban areas and imposing increasing costs in time and wasted fuels.  Simply put, our surface transportation infrastructure is old and at capacity.  Unless we take this opportunity, we are setting ourselves up to do no better than the status quo.  That is not good enough."

Of particular importance to the aggregates industry are conclusions in the report focusing on improving coordination between states and metropolitan areas on how transportation and land use will be coordinated to meet congestion and other goals.  This would include ensuring that needed aggregate resources are not made unavailable for road and highway improvements.  

The debate now begins in earnest, following not only the commission report, but the U.S. Government Accountability Office December report on freight transportation and the U.S. Chamber of Commerce's transportation policy imperative.  NSSGA believes no financing options should be off the table from increasing the fuel user fee to increased tolling, public private partnerships where they make sense and new ideas like a carbon tax directed to transportation infrastructure. Your comment?

Construction spending predictions

Reed Construction Data predicts that total construction spending will increase 3.8 percent in 2008 (which will nearly match cost increases) and then gain 9.3 percent in 2009, as the housing market experiences an expansion. Residential spending will drop 6 percent in 2008 and then expand by 10 percent in 2009. Non-residential construction spending will increase 12 percent in 2008 and 8 percent in 2009. Heavy construction spending will increase 11 percent in both 2008 and 2009, which will reflect project cost increases for cement, steel, aggregates and skilled labor. Highway spending, while up 12 percent in the second half of 2007, will trail growth in the rest of the heavy construction market again in 2008. Your comment?

Global demand for aggregates

Global demand for construction aggregates is expected to grow 4.7 percent annually through 2011 to 26.8 billion metric tons, valued at $201 billion. Some of the strongest sales increases will be registered in India, which is already one of the largest national markets, as well as in the huge Chinese market. Smaller markets such as Indonesia, Thailand, a number of developing countries in Asia, and Iran will also record strong gains, spurred by industrialization activity and continued growth in infrastructure construction. Growing environmental and land use concerns will spur above-average sales gains for aggregates composed of recycled materials like crushed hydraulic and asphaltic concrete and waste materials such as fly ash and blast-furnace slag. These and other trends are presented in World Construction Aggregates, a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

Advances will not be as strong in the developed areas of the world, including the U.S., Japan and Western Europe. Infrastructure repair and maintenance construction will drive demand in these areas through 2011. An increase in nonbuilding construction projects in the US will also contribute to overall aggregates market growth, despite a slowdown in residential building activity.

The nonbuilding construction market, which accounted for more than 70 percent of worldwide aggregates demand in 2006, is forecast to be the fastest growing. Gains in nonbuilding construction will predominantly be fueled by an increase in road
and highway development in developing nations. Demand for construction aggregates used in the production of asphaltic concrete will climb the fastest of all major application categories, spurred by growth in road building and maintenance construction around the world. Aggregates used in hydraulic concrete applications, which accounted for approximately 40 percent of total 2006 product demand, are expected to rise at a slightly more moderate pace. Your comment?