How big is our industry? How big a role does concrete play in the overall construction industry? We are often asked these questions, so we decided to find out for ourselves.
Our research shows that the concrete market is strong and healthy; in fact it accounted for nearly 11% of the value of U.S. construction in 2004—that's $109.6 billion, up from $79.6 billion just five years ago. And the 2005 numbers are on track for another good year as concrete work continues to provide a solid foundation for the nation's construction industry.
Of the nearly 484 million cubic yards of ready-mixed concrete produced last year, the single largest use was in the booming residential sector, which claimed more than 199 million cubic yards. Highways and streets five years ago led consumption by a handy margin but in 2004 fell to second place volume usage, coming in at a bit more than 145 million cubic yards.
On October 3, the U.S. Census Bureau reported that construction for 2005 is now estimated at a seasonally adjusted annual rate of $1.109 trillion, up more than 7% from 2004. And even before Hurricanes Katrina and Rita slammed into the Gulf Coast region, the Portland Cement Association (PCA) was predicting that 2005 would be a third straight record year of cement consumption.
PCA also notes a trend toward greater cement intensity, a measure of cement usage per million dollars of construction activity. This rose from 153.5 tons per million dollars in 2003 to 160.6 tons per million dollars in 2004. Much of that increase is attributed to concrete's relatively competitive price position compared with other building materials.
One of the big future concerns is whether cement supply can keep up with the strong demand—shortages were reported in several parts of the country this past summer. Noting that domestic production has been operating at capacity and continues to do so, PCA says imports are the key to keeping up with demand. And although New Orleans is the second largest U.S. cement import terminal, handling 10% of imports, the disruption caused by the recent hurricanes will be offset by the lack of new construction in the area. PCA reports that cargo ships destined for New Orleans were reassigned to other ports following the storms, ensuring a continued supply, although land transportation then became an issue. In the longer term, experts expect an increased demand for cement in the region, even greater than usual after a hurricane, because flooding caused more basement and foundation damage than normal. And that will keep the pressure on the supply chain.
Tilt-up on the rise
While office and industrial construction are only now returning to the levels of five years ago, when we published our last comprehensive report, tilt-up construction has continued to grow in those markets. Typically competing more with precast and masonry than with cast-in-place concrete, tilt-up construction's square footage in 2004 was up only a modest 7% from 1999. However, with office and industrial construction in 2004 less than half of what they were in 1999, it becomes clear that tilt-up is making real progress. The Tilt-Up Concrete Association reports that in 2004 the total amount of tilt-up hit an all-time high of 265.4 million square feet of wall.
ICFs are hot
Insulating concrete forming technology is yet another player making inroads into concrete building construction. ICFs are slowly increasing their penetration into the commercial and residential building markets.
According to the Insulating Concrete Form Association, in 1999 ICFs accounted for roughly 1.2% of the above-grade residential market. Now that has climbed to 4% in a market that has grown significantly over the past five years. Looking toward the nonresidential side, the organization in September entered into an agreement with the National Ready Mixed Concrete Association to promote ICFs to the commercial building sector.
Where does the growing field of decorative concrete fit into the economic picture? Hard numbers are difficult to come by in this fragmented portion of the industry. Information on producer-supplied decorative concrete, such as that supplied with integral color, is sparse. Estimates are that integral color remains at less than 1%. And the majority of decorative treatment is field-applied, again not lending itself to being quantified.