This week saw the first rise in US interest rates in seven years as the US Federal Reserve signalled its belief that the economy was getting back on its feet and that the financial recovery was gaining momentum.

The renewed optimism for the US economy and the prospects for greater cement consumption in the coming year is based on a more vigorous uptake of construction and housing projects. The strength of the recovery is far from certain though and financial markets will need to see continued improvement in the basic statistics for housing starts, infrastructure projects and cement volumes going forward.

Financial analysts JP Morgan report that US housing starts in November 2015 beat expectations jumping 10.5 per cent, while permits were up 11 per cent and 25 per cent YoY. The main area of growth is with multi-family developments with housing starts up 16.4 per cent and permits rising by 26.9 per cent for this type of residential accommodation. Single-family starts also rose by 7.6 per cent in November, although new permits were slower to grow at 1.1 per cent.

The US cement industry will also be looking towards the new Highways Bill to keep cement consumption levels heading up. In the last week, the Portland Cement Association (PCA) has stated that the Fixing America Surface Transportation (FAST) Act will provide more than US$305bn to maintain and improve the federal highways over a five-year period.

“FAST represents an average addition of 835,000tpa to the cement industry,” said Ed Sullivan, chief economist and group vice-president at the PCA. “Smaller increases occur in the near term (370,000t for 2016) and larger net increases occur in the out years of the forecast horizon (1.4Mt for 2020).”

Cement producers are also set to benefit from strengthening cement prices, which have risen by eight per cent in 2015 and by five per cent in 2013-14, according to economic analysts IHS. Cement companies are seeking to recoup some of their investment for monitoring and filtering equipment required by the new NESHAP regime, which has affected their margins.

Away from the US, there has been evidence of a cement market upturn in Vietnam, Indonesia, Colombia and Peru this month. The trend is far from universal but as ICR’s forthcoming January issue will highlight, the new plant construction and expansion projects are affording cement equipment suppliers a little more room for optimism as we head into 2016.