Moderate Increases For Ready Mixed In 2007

By Cherish Schwenn | September 28, 2010

What does the future hold for the concrete industry in 2007? If the slumping residential market continues, 2007 could prove to be a challenging one for WRMCA producer members.

Fortunately, WRMCA members enjoy a good challenge and are skilled at profiting from emerging opportunities.

Market Realities

The Wisconsin Department of Transportation forecasts statewide use of concrete on its projects could decline by as much as 60 percent in 2007. Though this will have a more drastic affect on Wisconsin's concrete paving industry, a considerable segment of the state's ready mixed industry will also be affected.

Other concerns facing WRMCA producer members in 2007 include training new and existing employees, addressing the effects of globalization on raw material supply, maintaining focus on environmental responsibilities, improving customer relationships, and producing quality concrete products.

Market Economics

The Portland Cement Association has published its national forecast on cement consumption for 2007 by predicting a modest growth rate of 0.3 percent, due mainly to the effects of the slowing national housing market. However, the PCA believes cement intensities — tons of cement per construction dollar — will increase by 3 percent. Major reasons cited for this increase included "cement-friendly" code changes in hurricane zones, increased use of concrete for above-grade structural wall systems in both residential and non-residential construction, enhanced use of cement-based products like cement board, and the growing use of concrete to achieve sustainable development goals

WRMCA producer members expect Wisconsin's construction market to reflect PCA's projected national trends.

Market Opportunities and Drivers

That being said, there are a number of emerging opportunities for boosting demand in Wisconsin in 2007 for ready mixed concrete. Expanding markets for state ready mixed producers include parking lots, above-grade structural concrete wall systems (Insulating Concrete Forms (ICFs) and site-cast tilt-up technology), decorative concrete flatwork, and pervious concrete pavements.

The added importance in Wisconsin by federal, state and local municipalities on energy efficiency and "green building" has greatly increased interest by state architects and engineers in the use of ready mixed concrete for pavements, structural walls and storm water runoff management systems.

An increasing number of consumers and homebuyers are also embracing sustainability values.

Rising heating costs are generating growing interest by Wisconsin homebuyers and builders in the inherent energy efficiency of ICF homes. Through successful promotion efforts by architects, builders and WRMCA members, ICFs have gained momentum in the state, which now ranks as the third largest ICF market in North America behind Minnesota and Ontario, according to the Insulating Concrete Form Association (ICFA). Light commercial building owners statewide are also turning to ICF structural technology to improve building comfort and efficiency, sound control and safety, and reduce heating and cooling costs.

Decorative concrete's attributes such as great look, durability and low maintenance are key reasons for its continued growth in patios, driveways, pool decks, flooring systems, entryways, paths and river-walks markets. Increases are expected in 2007 in residential, commercial, municipal, and institutional uses of decorative concrete.

A U.S. Environmental Protection Agency-recognized best management practice for first-flush pollution control and storm water management, pervious concrete is an infant market in Wisconsin, waiting to explode. In response to market demand, the Wisconsin Ready Mixed Concrete Association recently became the LSG (local sponsoring group) throughout Wisconsin and Michigan's Upper Peninsula for providing Pervious Concrete Contractor Certification.

Modest Increase

While the slowing housing market and expected decrease in WisDOT concrete projects will impact state ready mix producers, emerging opportunities and the expansion of existing markets will lead to a modest increase in ready mixed demand for WRMCA members in 2007.