1. Portland Cement Association United States’ Cement Outlook
Ed Sullivan, SVP Chief Economist
August I Intercontinental HoteI Magnificent Mile, Chicago

2. Cement Consumption Thousand Metric Ton SAAR
7 Models: Range 4.62% to 2.87%
On-Line Survey suggests lower end.
Call arounds suggests more optimism.

3. Portland Cement Consumption Thousand Metric Tons
Summer
2014 = 8.7%
2015 = 3.7%
2016 = 3.9%
2017 = 4.2% =

4. Economic Trends a Presentation Summary of Results
Comparative Life Cycle Analysis Research
Building Materials
Single Family, Multi Family, and Commercial Structures
Done By
MIT Concrete Sustainability HUB

5. Labor Markets Remain Strong
Net Job Creation Thousand Workers
Net Job Creation Annual, Thousands

6. Unemployment Normal Definition, U-6
Unemployment Rate

7. Wealth & Sentiment Ease
Consumer Sentiment Index University of Michigan, Composite
Average Home Price

8. a

9. Fixed Investment Energy Sector Weighs on Investment Y-O-Y % Change
Fixed Investment Drag On GDP Y-O-Y % Change

10. Oil Price Outlook EIA, August Short Term
83% Increase.

11. Government Spending Y-O-Y Growth Rate
S & L :
Accounts for 62.5% of Total Government Spending

12. Value of the Dollar Broad Composite Net Exports Annual Drag

13. Inventory-to-Sales Ratio
Inventory Changes
Inventory Changes
Inventory-to-Sales Ratio

14. Monthly Inflation Rate Percent Change, CPUI
Interest Rates
Monthly Inflation Rate Percent Change, CPUI
Federal Funds Rate

15. Real GDP Growth Rate % Change

16. Manufacturing, Oil, and Agg ExposureME RI MA VT NH AL GA SC TN FL MS LA TX OK NM KS MN IA MO AR WY CO ND SD NE WA ID MT OR NV UT AZ CA WI IL IN MI OH WV VA NC MD DE PA NY CT NJ KY
Manufacturing
Energy
Energy
& Agriculture
Manufacturing
& Agriculture

17. Housing Outlook a Presentation Summary of Results
Comparative Life Cycle Analysis Research
Building Materials
Single Family, Multi Family, and Commercial Structures
Done By
MIT Concrete Sustainability HUB

18. a
Housing Outlook
Low mortgage rates, job gains help in affordability despite strong gains in home prices.
Millennials burdened by debt, forming households and families later and not as accepting that homeownership a safe bet for asset accumulation, are slow to enter the new SF market.
Low inventories, rising prices should provide incentive to accelerate building.
Skilled workers left the construction workforce and the pipeline is slow to replenish. Reduces starts by as much as 100,000 annually.
PCA takes a conservative position. Upside risks.

19. Single Family Starts Thousands Multi Family Starts Thousands
Housing Starts
Single Family Starts Thousands
Multi Family Starts Thousands

20. Potential Housing Risks
Single Family Starts
Multi Family Starts
Total Starts
2016
2017
2018
Starts, Units
PCA
793
869
944
392
393
394
1,185
1,262
1,338
NAHB
888
992
386
372
1,179
1,280
1,364
MBA
825
954
1,050
391
405
400
1,216
1,359
1,450
Fannie Mae
794
909
---
404
428
1,198
1,337
Difference From PCA, Units 19 48 -6 -1
-22 18 26 32 85
106 12 6 31 97
112 1 40 35 13 75
Implied Tonnage Risks, Thousand Metric Tons
409
1,032
-51 -9
-187
845
688
1,828
2,279
102 51
680
1,930
2,330 22
860
298
124
1,158

21. Nonresidential Outlook
Presentation
Summary of Results
Comparative Life Cycle Analysis Research
Building Materials
Single Family, Multi Family, and Commercial Structures
Done By
MIT Concrete Sustainability HUB

22. Nonresidential Outlook Percent Change on Real 2009 $
2015
2016
2017
2018
2019
2020
2021
Nonresidential Buildings
17.1%
4.8%
3.3%
3.2%
Industrial
30.8%
-7.5%
0.2%
2.1%
2.6%
2.7%
Office
17.2%
14.0%
5.6%
4.4%
4.0%
3.6%
Hotels, Motels
25.5%
20.3%
6.1%
3.1%
2.5%
Hospitals, Institutions
10.0%
2.8%
3.7%
3.9%
3.5%
Religious
4.7%
1.5%
1.2%
1.1%
1.4%
Educational
0.1%
4.3%
3.4%
2.9%
3.0%
Other Commercial
7.8%
8.4%
Public Utility & Other
-9.6%
2.3%
1.7%
1.6%
2.0%
Farm Nonresidential
-3.9%
-4.5%
-2.3%
-0.6%
0.0%
Miscellaneous
-1.4%
-0.5%
2.2%

23. Cement Consumption: All Buildings
Metric Tons (000s)
Actual and Projected
Volumes
Source: PCA

24. Relative Lumber Price Scenarios (Lumber PPI/Concrete PPI: Base Year = 2002)
Relative Price is the change in a material’s PPI compared to that of concrete’s. An upward trending line indicates an increase in concrete’s competitive price position.

25. Cement Consumption: All Buildings
Metric Tons (000s)
Volume Lost to
Market Share Erosion
Actual and Projected
Volumes
Source: PCA

26. Tonnage Risks:
Metric Tons of Cement Consumed
Source: PCA

27. Public Outlook Presentation Summary of Results
Comparative Life Cycle Analysis Research
Building Materials
Single Family, Multi Family, and Commercial Structures
Done By
MIT Concrete Sustainability HUB

28. Public Construction Million Real $
Fall
2014 = -1.1%
2015 = +3.8%
2016 = +2.8%
2017 = +2.3% =

29. Conclusions Presentation Summary of Results
Comparative Life Cycle Analysis Research
Building Materials
Single Family, Multi Family, and Commercial Structures
Done By
MIT Concrete Sustainability HUB

30. Portland Cement Consumption Thousand Metric Tons
Summer
2014 = 8.7%
2015 = 3.7%
2016 = 3.9%
2017 = 4.2% =

31. Composition of Changes in Cement Consumption
2016
2017
Public,
43%
Public,
43%
Other:
Utilities, Energy, Agriculture, & Mining

32. Imports Are More Attractive
Value of the Dollar Broad Composite
Baltic Dry Index

33. Import Share Gains 2020: 20.0% 2017: 16.4% 2015: 10.9%=
Percentages are Imports Market Share

34. Portland Cement Association United States’ Cement Outlook
Ed Sullivan, SVP Chief Economist
August I Intercontinental HoteI Magnificent Mile, Chicago