Editorial: Sunny Forecast
February 1, 2013 by Corinne Lynds
Fresh back from my annual pilgrimage to Las Vegas for World of Concrete (WOC), I’m optimistic about what 2013 holds
for Canada’s construction industry.
For the past four years, I have walked the show floor chatting with our American colleagues, hearing their comments on the strength of the Canadian economy. “We love the Canadians,” said one manufacturer. “When everyone in the U.S. stopped buying, the Canadians were keeping us alive.”
There’s little doubt that we faired well during the recession compared to our neighbours to the south. That said the Canadian economy is still very closely tied to the U.S.
It is for this reason that I never miss the annual forecast that Portland Cement Association’s chief economist Ed Sullivan presents at WOC.
This year’s forecast was delivered with more fan-fair than usual. Sunglasses were distributed to all of the journalists as Sullivan presented his “sunny” forecast.
He pointed out that there are several factors indicating the U.S. economy is poised for significant growth this year. “Household debt has been declining for five years, the Euro Zone didn’t collapse, the Chinese didn’t go into recession, employment has held up and home prices are starting to rise again,” said Sullivan.
He explains that recessions correct imbalances created during previous boom periods, so during a recession and in the years immediately following, businesses and individual consumers are cautious. They focus on saving and paying down debt. They put off major purchases such as new cars, homes or commercial property.
Now, according to Sullivan, “banks have never been healthier, credit quality is at a high, and credit scores are dropping.”
The non-residential segment should see double-digit gains continued from 2012. Sullivan predicts 8.3 per cent growth this year in terms of cement use, and a continued growth into 2014 since the need for new schools, roads, prisons and other infrastructure is also growing.
This is good news for the construction industry on both sides of the border. Large infrastructure projects create thousands of jobs for all kinds of contractors, sub-trades, architects and consulting engineers. It means increased business for equipment manufacturers and distributors too.
Sullivan’s forecast was pretty “sunny,” and the skeptical journalist in me isn’t quite ready to dawn the sunglasses yet, but his optimism is contageous.
Corinne Lynds / Editor
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