The year 2024 is going to be a significant election year for the world, with several of the largest cement consuming nations going to the polls. This week, we look over the key markets of Bangladesh, Indonesia, Pakistan, Russia, the United States and Mexico, and assess the geopolitical risk on cement demand in these nations.
Bangladesh boom
Last Sunday, Bangladesh's Prime Minister, Sheikh Hasina, won a fourth straight term, giving her another five years in power. While controversial, Ms Hasina has presided over a period of stability and exceptional growth for Bangladesh, reflected in the country's dramatic expansion in cement consumption. Major projects such as the Padma bridge, Dhaka rapid transit line 6 and Rooppur nuclear power plant are expected to help the country’s cement demand reach 42.37Mt in 2024, according to the Global Cement Report, 15th Edition (GCR15).
Indonesia looks to soak up overcapacity
February is the election month in Indonesia. Prabowo Subianto, Indonesia's defence minister, Gibran Rakabuming Raka, the eldest son of former President Joko, and former Central Java governor Ganjar Pranowo are the front runners. Building the new capital at Nusantara in Borneo is a hot topic of debate. This long-term project, among others, reassures cement producers of continued demand, which is likely to surpass 65.07Mt in 2024, says GCR15.
Political uncertainty hinders Pakistan
More turbulence can be expected in Pakistan, where former Prime Minister and PML leader, Nawaz Sharif, returned last year and looks set for victory in the elections set for 8 February. His rival, Imran Khan, remains in jail, resulting in claims that Pakistan's vote is rigged. But with military support lining up behind Mr Sharif, this is likely to be the deciding factor. Political instability has come at a cost, delaying vital initiatives including the Public Sector Development Program. With a 10.8 per cent drop in domestic cement demand in 2022, and a further 3.7 per cent drop in 2023, Pakistani cement producers will be hoping for a return to functional governance soon. GCR15 predicts a Pakistani cement demand of 44Mt in 2024.
Russia's external policies impact domestic cement consumption
President Putin's position looks stronger than ever in Russia and he will go to the polls in March expecting solid backing for his Russian-Ukraine war and policy of aggression against the West. Two candidates have been approved to run against Putin. These are Leonid Slutsky of the nationalist Liberal Democratic Party and Vladislav Davankov of the New People Party. While the election looks a formality for Putin, his war has weakened the Russian economy, which has been propped up by high energy prices and policies to counteract Western sanctions. Nevertheless, cement consumption continues to grow. A gradual increase by 2.3 per cent to 64.2Mt is forecast by GCR15.
North and Central American showdowns
President Biden and Donald Trump expected to lock horns in the USA again this election year. Mr Trump is vowing to make sweeping changes, including overhauling the federal civil service with loyalists and imposing tougher immigration policies. In addition, he intends to be rid of Obamacare health insurance as well as inflicting harsher trade curbs on China. Meanwhile, Mr Biden claims he will defend American democracy and while he prevented a recession, he oversaw inflation hitting a 40-year high in 2022. Immigrant numbers have also continued to climb. The Infrastructure Investment and Jobs Act and the Inflation Reduction Act will add 46Mt of cement consumption to the US over the next five years, but GCR15 only estimates a two per cent rise in cement demand in 2024 to 109.75Mt.
Lastly, Mexico will head to the polls in June 2024. Former Mexico City Mayor, Claudia Sheinbaum of the We Keep Making History alliance, will face Senator Xóchitl Gálvez of the Broad front for Mexico Party. Sheinbaum has a 20 per cent lead. Ms Sheinbaum is an environmental engineer promising continuance of the incumbent president’s policies. Her opponent, Ms Gálvez is depending on the middle-class or disenchanted young voters for her support. Cement consumption has below 44Mt in the last four years and is set to fall 0.5 per cent in 2024 to 43.65Mt, according to GCR15.
All eyes on 2024 election results
All of these key economies will be tested in 2024, and decisions made by the election winners will have considerable consequences on spending and cement consumption prospects. So, there are many reasons for expecting 2024 to be a significant year for construction growth and cement demand. Voters will hope that whoever wins is able to create the necessary stability for sustained economic growth.