Although many regional markets throughout the U.S. experienced strong cement consumption growth earlier this year, a new forecast from the Economic Research Department at the Portland Cement Association expects the remains of the year to be quite different. In the state-by-state forecast presented in September at the association's committee meetings in Chicago, chief economist Ed Sullivan predicted that the emerging weakness in residential construction will dissipate the strong growth recorded earlier in the year in many regional markets.

"In July, 24 states showed significant declines in housing permit activity, including traditionally strong markets, such as Nevada, Florida and Arizona," Sullivan said. "I do not believe these declines will be temporary."

According to the summer forecast, Sullivan expected housing starts in 2006 to decline by 10.6 percent, followed by a similar decline in 2007. The association's most recent forecast points to high new home inventories, raising interest and inflation rates, and slower net job creation as contributing factors to an even greater residential slow-down. The decline in residential building was not unexpected. However, according to Sullivan, the nonresidential and public construction sectors are not experiencing the growth rate predicted earlier this year.

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