Ed Sullivan, Chief Economist and Senior Vice President of Market Intelligence, Portland Cement Association
The Voice Newsletter February 2024

Edward Sullivan is Chief Economist and Senior Vice President of Market Intelligence for PCA.  His analysis and views regarding the national construction, cement and concrete industries are widely used in corporate planning efforts, the financial industry, and media. 

At World of Concrete in January, the Portland Cement Association, which represents America’s cement manufacturers, presented its updated economic outlook for 2024. While we anticipate a gradual weakening in the first half of 2024, followed by a slow recovery in the second half, the likelihood of a recession this year is low. Residential housing, real estate, and commercial building construction remain vulnerable due to rate hikes and an uncertain market, but the non-residential construction sector is poised to be supported by the Infrastructure Investment and Jobs Act (IIJA) and the Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act. These legislative shifts promise both progress and challenges:

IIJA: Progress and Opportunities

1. Massive Investment: The IIJA, signed into law in 2021, injects a staggering net new $550 billion into the nation’s infrastructure. It targets roads, airports, bridges, railroads, waterways, and broadband networks.
2. Project Momentum: The Biden administration reports that around 40,000 IIJA projects are already underway or completed. These range from rural airport upgrades to major transportation artery revitalizations.
3. Sustainability Boost: Demand for sustainable building materials will continue to drive competition across the market particularly as ESG becomes more of a focus throughout the procurement process for those seeking government contracts.

CHIPS Act: Semiconductor Leadership and Construction

1. Restoring U.S. Leadership: The CHIPS Act allocates nearly $50 billion in direct federal funding to bolster semiconductor manufacturing. This move aims to restore U.S. leadership in this critical industry and will pave the way for construction sector growth.
2. Construction Implications: The CHIPS Act will likely spur construction projects related to semiconductor manufacturing. Already, there are projects totaling at least $30 billion in the pipeline. For instance, the $7.5-billion Micron semiconductor fabrication facility in Boise, ID, broke ground last October.

In summary, while challenges persist, the combined impact of IIJA and CHIPS promises a dynamic landscape for construction businesses. These projects are set to channel more than $300 billion into the construction sector, driving growth and resilience. Continued adaptability, sustainability, and strategic planning will be key as the industry navigates these shifts.

The Portland Cement Association stands ready to help the cement-concrete-construction value chain navigate 2024 and beyond. Visit cement.org to learn more.