Greenwich, CT, April 14, 2016 --(PR.com
)-- The forecast provides global and regional outlooks, based on the detailed perspective of 55 of the world’s most important countries’ demand-supply model, reflecting overall approximately 95 percent of total global cement demand. The five-year outlook presented in this benchmark study enables industry professionals to shape their perspective on markets and business priorities.
China’s slowdown expected to affect global market
“The monumental cumulus of global economic challenges in 2015 is bound to put the brakes on global cement markets in the coming years,” says Robert Madeira, CW Group Managing Director and Head of Research. “We are witnessing China’s unprecedented falling cement capacity and demand, a development, that alone is responsible for the negative forecast revisions in our update, and which drags down traditional bright spots of the cement market.”
The Chinese domestic market remains under pressure, as export prices are unable to compete with Mediterranean producers on a long-term basis. Nearby Russia will have lower volumes as the economic output declines, while the Indian market is boosted by strong construction investment.
The 1H2016 GCVFR update highlights that during 2015-2020, the main drivers of the cement industry will be Asia - ex China, with an expected 5.0 percent increase. Africa, along with Central and Eastern Europe are both expected to grow at a 4.0 percent. In Africa, however, demand is expected to increase at a slower rate than previously anticipated, also due to the decline in price of oil and other commodities.
On a regional level, CW Research analysis showcases that Latin America and Africa will see the largest downward revisions in terms of 2015-2020 growth in cement consumption, while forecasting stronger growth in Western Europe in 1H2016.
For 2016, CW Research expects strong growth to be registered in U.S. cement consumption, while for Canada, the cement demand is expected to be 1 percent lower than the 2H2015 forecast.
In the years to come, growth in the Middle East will be driven by Iran, which benefits from the lifting of sanctions, leading to increased investments that will ultimately boost consumption of cement.
The quantitative update to this CW Research’s benchmark study sees Brazil’s cement consumption projected to decline even further as the economic crisis prolongs and further inhibits construction development.
Within Western Europe, Italy leads the upgraded forecasts, while in Germany, the slowdown in cement consumption will continue to be visible in 2016, according to the 1H2016 update to the Global Cement Volumes Forecast Report.
Moreover, updates on Central and Eastern Europe cement consumption are dominated by the slowdown in the Russian market, and by the pressures of the domestic demand in Turkey. The continuing challenging economic scenario drove CW Research to downgrade the previous forecast by 3.0 percent in 2016.
Bright spots of the cement market forecast
CW Research’s quantitative update to its Global Cement Volume Forecast Report forecasts a strong growth in Senegal, despite weak commodity prices and Iran benefitting from the lifting of sanctions. On a similar brighter note, Indian construction activity remained robust in spite of a weak monsoon in 2015. Other markets with better-than-anticipated prospects are Pakistan, where the domestic market remains strong despite a decline in exports, and Saudi Arabia, with strong resilience to the decline in oil prices decline and robust investment in construction. Indonesia is also seen as a bright spot with strong governmental support to the infrastructure.
Forecast with a slow global recovery
“The continued slowdown in China is impacting cement growth in export dependent markets. The capacity rationalization already taking place in China will lead to improving utilization levels at a global scale,” says Stefana Abiculesei, Consulting Analyst with the CW Group’s European team. As the global geopolitical and macro-economic context continues to be challenging, CW Research expects a slower recovery in cement volumes. “2016’s forecast gives a negative outlook on the upcoming volumes of cement consumption. The decline in global volumes in 2016 will not be offset by the sustained growth in certain developed markets, while demand from emerging economies in Asia and Africa will give a positive, though marginal, impetus to growth.”
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