2014 global growth accelerates to 4.2 percent, consumption to reach 4.2 bill ton

According to CW Research's 2H2014 Global Cement Volume Forecast Report, renewed confidence in construction market conditions will positively affect the general global outlook

CW Research forecasts 2014 global growth to accelerate to 4.2 percent and consumption to reach 4.21 billion tons, up from 3.9 percent forecasted by the group in February 2014 in its twice-yearly assessment of global cement markets. We anticipate that renewed confidence in construction market conditions will positively affect the general global outlook, with annual consumption reaching 4.8 billion tons by 2018.

ÔÇ£There are several markets which we anticipate will surprise analysts in terms of consumption growth and production output. The revival of several real estate markets, the economic stabilization of markets which had been severely affected by the financial crisis, as well as renewed confidence in the construction sector give us reason to be cautiously optimistic about the future growth of cement markets,ÔÇØ said Robert Madeira, Managing Director and Head of Research.

Globally, cement consumption picked up by 7.6 percent per year on average between 2009 and 2013, but our research shows 3.6 percent growth per year on average for the 2013-2018 period.  Per capita cement consumption growth for 2013-2018 will also likely contract in comparison to previous years.

Worldwide, the total addition to the 3.9 billion-ton base capacity is estimated to reach 1.5 billion tons by 2018. In 2014, the largest increase in capacity will come from Egypt, where we expect a growth of 21 percent. The year will end with capacity increases of over 10 percent for Indonesia, Iraq, Russia, Tunisia, and Vietnam.

The Chinese cement market will slow in coming years. After consumption expanded by 10 percent in 2013, 2014 will end with only 5 percent growth. The country has long been struggling with overcapacity, which has been exacerbated by the recession. The Chinese government is cutting back manufacturing capacity and several cement plants have already closed. Moreover, the residential property market, which was the biggest domestic cement consumer, fell in 2014 and is expected to continue to do so in the future. The Chinese real estate market is experiencing its slowest pace of growth in 24 years.

At the broader regional level, we continue to predict divergent performance for different regions of the world. Developed regions will come to see slight recoveries in cement demand. For 2013-2018, we expect developed regions to escape downward trends and developing regions to underperform when compared to previous years.

Consumption levels will drop considerably in Latin America, the Middle East, and China.  This year's forecast gives a positive outlook on the future of cement volumes. Though growth will not reach the figures experienced between 2009 and 2013, the better performance of markets that were troubled in the past (e.g., United States, Europe) gives a positive nod to the future. The biggest disappointment will come from China: though the market will still hold the biggest share of the cement global market, its growth will significantly slow in the years to come.

For a complete table of contents of the report, please visit the CW Research website or the report overview page here.