Canadian Cement Construction Outlook David Czechowski Sr Canadian
- Slides: 33
Canadian Cement & Construction Outlook David Czechowski, Sr. Canadian Economist
Subprime Not An Issue Canadian Outlook n Mortgage Financing much more Conservative § § n No Tax Write Off discourages unmanageable mortgages Speculative Lending Less Active Overbuilding Less Prevalent Delinquencies running at record lows Subprime Only 5% in Canada vs. 20% in U. S. § Focus not on capturing share of subprime segment n Only 22% of Canadian subprime borrowers seek variable rates vs. 50% in U. S. n Canadian firms rarely finance in excess of 100% of loan, a more prevalent U. S. practice, and require PMI on high-ratio loans. n Bank of Canada supportive of liquidity “This Hurricane in the U. S. is more like a rain shower in Canada”
Canadian Outlook The Issues Are… n Employment Growth n Oil/Commodity Prices n Dollar n Inflation § “Policy is a Team Sport” n Consumer Debt § More pressure on Housing? n Housing Decline § Soft Landing Predicted
Canadian Outlook Employment Growth Forecast Thousands 120 80 2007 2. 2% 2008 1. 7% 2009 1. 7% 2010 1. 6% 2011 1. 6% 40 0 -40 03 04 05 06 07 1. 4% 2. 0% YTD Oct: 2. 3%
Canadian Outlook Employment Growth Thousands 120 80 40 0 -40 03 04 05 Manufacturing 06 Services 07
Canadian Outlook Retail Sales 10 Year-Year % Change 3 MMA 8 6 4 2 03 04 05 06 07 08
Canadian Outlook Petrodollar Remains Elevated In U. S. $ 1. 10 1. 00 0. 90 Forecast $/BBL 2007 . 912 2008 . 903 2009 . 886 80 2010 . 880 70 2011 . 876 90 60 Dollar (Left Scale) 0. 80 50 40 0. 70 30 Oil (WTI) (Right Scale) 0. 60 20 0. 50 10 01 02 03 04 05 06 07 08
Canadian Outlook Mortgage Rate Percent 9 8 7 6 5 4 00 01 02 03 04 05 06 07 08
Canadian Outlook % of Household Income required for Homeownership Costs Housing Affordability 60 YTD June 50 45% Two-Storey 40 40% Detached Bungalow 30 32% Townhouse 20 28% Condo 10 85 87 89 91 93 95 97 99 01 03 05 07 09
Residential Permits Canadian Outlook
Canadian Outlook Housing Starts Forecast Units (000) 260 240 2007 - 4. 0% 2008 - 2. 4% 2009 0. 9% 2010 1. 3% 2011 1. 7% 220 200 3 Month Moving Average 180 03 04 05 06 07
Canadian Outlook Nonresidential Permits $ Billion 35 30 25 20 15 3 MMA - SAAR 10 2004 2005 2006 2007
Nonresidential Permits Canadian Outlook
Canadian Outlook Construction Spending Forecast Index 1999=1. 0 2. 0 1. 7 2007 0. 7% 2008 1. 0% 2009 2. 2% 2010 2. 2% 2011 2. 5% Engineering Residential 1. 4 Nonresidential 1. 1 0. 8 99 00 01 02 03 04 05 06 07 08 09 10 11
Canadian Outlook Canadian Economic Profile 2006 Employment 2. 0% Dollar Retail Sales Housing Starts 2007 - 2008 2009 - 2011 Fundamentally Healthy Slower Growth . 882 Stubbornly High Softening Begins 6. 4% Supportive Moderate Slowdown 227. 4 All Regions Weaken Soft Landing Real GDP Growth: 2. 6% - 2. 9%
Canadian Cement Market
Canadian Outlook Industry Profile n Consumption: 9. 3 mmt n Clinker Capacity: 16. 6 mmt n 17 Plants/9 Companies § Production concentrated (68%) in Ontario/Quebec n. Average Kiln Capacity up 40% in last ten years n Grinding Capacity: 19. 0 mmt n Imports - Clinker n 50, 000 mt/Year Average n. Sources: Turkey/Brazil/Venezuela/China (‘ 06)/U. S. § Mostly into Quebec n Imports - Cement n 725, 000 mt/Year Average n. Source: U. S. mostly into Ontario/Alberta/BC
Canadian Outlook Cement Capacity Utilization New Capacity: Lafarge, Exshaw, AB +900, 000 On Stream: 2010 Percent 95 U. S. 90 85 80 75 96 97 98 99 Source: PCA Labor/Energy Input Survey 00 01 02 03 04 05 06
Canadian Outlook SCM Consumption Million Metric Tonnes 2007 YTD Sept: + 4. 6% 1. 4 1. 3 1. 2 1. 1 1. 0 0. 9 00 01 02 03 04 05 06
Canadian Share of U. S. Imports Canadian Outlook 2005 36. 0% 2006 53. 9% 2007 YTD Asia 2004 29. 5% Canada 21. 1% 16. 0% 14. 1% 20. 7% Europe 19. 7% 18. 5% 13. 0% 8. 4% Latin America 20. 9% 17. 4% 11. 4% 12. 4% Mexico 5. 3% 6. 5% 6. 3% 7. 7% Other 3. 6% 5. 5% 1. 3% 0. 5% 50. 3%
Canadian Outlook Cement & Clinker Exports Million Metric Tonnes 2007 Sept YTD: +8. 4% 8 6 4 2 82 85 88 Source: STC/CAC Survey 91 94 97 00 03 05 06
Canadian Outlook Key Markets Exposure (Five Year Average) Construction Spending Cement Consumption n Residential: 47% n Residential: 35% n Nonresidential: 19% n Nonresidential: 29% n n n Industrial: 3% Commercial: 9% Institutional: 7% n Engineering: 33% n n Transportation: 6% Other: 28% n n n Industrial: 7% Commercial: 16% Institutional: 5% n Engineering: 33% n n Transportation: 20% Other: 13%
Canadian Outlook Cement Intensity Tonnes/ Million 2006$ Composition of construction favors cement intensive nonresidential and engineering sectors 65 60 55 50 45 01 02 03 04 05 06 07 08 09 10 11
Competitive Materials (Index 2002=100) Canadian Outlook
Canadian Outlook Portland Cement Consumption Year-Year % Change Forecast 40 30 20 2007 2. 1% 2008 2. 4% 2009 3. 0% 2010 3. 3% 2011 3. 4% 10 0 -10 03 5. 1% 04 5. 0% 05 1. 2% 06 1. 7% 07 YTD Oct 2. 2%
Provincial Perspective
Canadian Outlook Economic Growth 2007 2008 2009 Atlantics 2. 8% 2. 0% 1. 9% Quebec 2. 1% 2. 2% Ontario 2. 0% 2. 3% Prairies 4. 0% 4. 3% 3. 8% British Columbia 3. 1% 3. 2%
Canadian Outlook Western Provinces - Net Provincial Migration Thousands 120 100 80 60 40 20 0 03 04 05 06 07 08 09 10 11
Provincial Bottom Line Canadian Outlook n Performance Indicators Strong but Will Slow n Employment Growth Advances at a Slower Pace n Stubborn C$ funding consumer spending but will drag on trade n Household debt levels may slow consumer n Residential Construction Markets Weak this Year and Next n Central provinces in search of a trough n Western provinces also showing fatigue n Subprime not an Issue n Nonresidential Construction Maintains Rise n Industrial/Commercial sectors positioned to support n Engineering Construction Opportunity in Place n Requirements plentiful with adequate funding available
Canadian Outlook Portland Cement Consumption Index 2000=1. 0 British Columbia 2. 0 1. 8 Prairies 1. 6 1. 4 Atlantics 1. 2 Quebec Ontario 1. 0 0. 8 00 01 02 03 04 05 06 07 08 09 10 11
Canadian Outlook Canadian Portland Cement Consumption Million Metric Tonnes 12 10 8 6 4 69 73 77 81 85 Canadian Recession 89 93 97 U. S. Recession 01 05
Canadian Outlook Risks n Weaker or Recessionary U. S. performance adds additional drag on growth and pressure on construction and cement demand. n The Dollar refuses to budge placing further drag on manufacturing and export sensitive industries and provinces. n Canadian Consumer reaches their income and debt spending limits slowing economic growth adding to additional downstream weakness.
Thank You
- Zenon czechowski
- Ashley czechowski
- Outlook incentive travel
- Verdelle smith tar and cement
- Refractory castable
- Rcc reinforced cement concrete
- Liquid solvent cement
- Manufacture of portland cement
- Shargh white cement
- Cement grouting method
- Miracle mix advantages and disadvantages
- Beaufort scale
- Squeeze cementing
- Non hydraulic cement
- Non hydraulic cement
- Slump value as per is 456
- Absolute volume formula
- Tensol cement advantages and disadvantages
- Setting reaction of zinc phosphate cement
- Cement line bone
- Zinc phosphate cement composition
- Dalmacija cement
- Gic types
- Classification of cement
- Vertical example
- Quick setting cement composition
- Bargarh cement works
- Semen sbc
- Dr rózsa noémi
- Reco cement
- Klas cement
- Cement steel silo
- F'c of concrete
- Vicat apparatus