Cement Tonnage for October Rebounds
According to recently released USGS data, cement shipments to the state of Alabama for the month of October 2018 grew by 11%, compared to the same period in 2017. When compared to September 2018, cement shipments had a much larger growth of 21%. The 125,231 tons shipped to the state in October represents the largest tonnage shipped to the state since Trendlines was started five years ago. Alabama shipments have now increased over the same period of 2017 for nine of the first ten months. Alabama has benefited from several large industrial jobs in the state which have increased the tonnage for the year and will help inflate demand in the future. However, we could expect a sharp drop off in shipments for the December and January months due to the tremendous rain the state experienced towards the end the year.
Utilizing the NRMCA conversion factor for cement tonnage used in the ready mix market, it is estimated that 463,732 cubic yards were placed during the month of October. For the year, Alabama has seen ready mix yardage grow by 11.5% over the first ten months of 2017. As we begin to move into 2019, I am concerned we likely see a contraction in ready mix yardage due to the slowdown in residential construction. The NAHB Housing Market Index has shrunk 17% from last year’s high and many builders are concerned about the increase in lending rates and housing affordability dragging down home construction.
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