(Sullivan, by the way, recently testified to Congress on the stimulus package and has received high praise for the accuracy of his predictions).

1.   Short Term Forecast:   The Bad News:  ‘Green shoots’ of recovery? … What green shoots?

• We have not bottomed out and we will remain dramatically depressed because an economy cannot truly recover until people are employed:  The number of job losses from Novemember 2008 through April 2009 are staggering (550,000 to 700,000 per month) and just because the job losses have slowed does not mean that we are recovering.  Since 2007, there have been 2.7 million job losses. 
• The impacts of the housing crisis will continue to be felt for many months and the private sector for construction will not recover before end of 2010. 
• There is no near-term relief until people start to go back to work and, once this happens, the point of “full recovery” is 2 years off .
• The recovery will be based on US Economic Policy. 
• Historically, this will be known as THE GREAT RECESSION.
• Considering imports and plant closures, the decline is 45 million metric tons of cement in 2010.
• This is due to MARKET IMBALANCES.  The US Cement Industry has embarked on its most aggressive period of expansion in history (25 million tons of new capacity).  The recession began in 2007 and the US Cement Industry did not feel it because import reductions absorbed the imbalances.  At the same time, changes in regulations for Supplementary Cementitious  Materials added another 2 million tons of “new capacity”.
• Plant closures (16).
• Plant utiliztion rates will decline: 80% projected.
• Stimulus Package will provide some relief, but hardship facing the industry will not be avoided.
• Further plant closures may materialize.

2.  Medium Term Forecast:   The Good News:  ‘ROBUST RECOVERY’

• In 2011 and 2012, 3 million new jobs will be added! 
• Cycles are temporary. Recssions are caused by market imbalances!
• The economy will come back and it is going to come back with a flury!
• You can expect to pay higher taxes because the government is funding the recovery with debt.
• There will be higher interest rates, higher taxes, and potentially higher inflation.
• The American consumer may show significantly different spending patterns (e.g. savings versus debt) which adds the potential of slower longer term economic growth.
• Moreover, the past cyclical peaks will not “fully recover” until 2015.
• We will be rewarded for our short-term pain:  The Highway Bill will be HUGE and it will be designed for the long-term (using concrete) rather than the short-term (tar & chip)! 
• Pent-up demand will be released.  
• There will be sustained double digit gains in 2011 and 2012, but we don’t reach the past cyclincal peak until 2015.

3.  Long Term Forecast:   The Great News:  Demographics will ‘Drive’ the Demand for Cement

• 65 million new people will “drive” the US economy from 2007 to 2030.
• You can take US Cencus Projections to the bank:  There will be 50 million additional licensed drivers in the US .
• Just to maintain the roads, there has to be a 25% increase in spending on roads.
• For “Green” reasons, the Government will enact measures to avoid highway congestion and fuel loss.
• Highways  Systems will be expanded.  The Obama Administration recognizes this as a problem.
• At the same time, we will have SYCHRONIZED WORLD GROWTH:   characterized by emerging middle class in developing economies.
• Oil Prices will increase again.
• New Cocker Installations: liquid asphalt: margins grow.  Concrete has a big advantage:   There will be 5.5. million tons of additional demand per year just based on increase market share for concrete over asphalt.
• Add the impact of ICF Home Construction (resulting from Lifetime CO2 savings by using concrete instead of wood).
• Non-residential construction will increase:
  i. Clean energy = hydro, wind, nuclear … lots of cement!!!
  ii. Successful clean energy … 28 licenses submitted for new nuclear power:  the demand for cement will be greater than anyone realizes.
  iii. Climate change are not in anyone’s estimates (based only on economics and demographics).
  iv. Outlooks is extremely bullish for cement even when the increased use of Supplemental Cementitious Materials are factored in.
  v. Cement production, if not increased, will create a 67 MTPA SUPPLY GAP.
  vi. ECONOMICALLY, POLITICALLY DEMOGRAPHICALLY, OUR COUNTRY IS GOING TO GROW.
• The LONG TERM 67 MTPA SHORTAGE cannot be bridged by new imports because:
  1. Port congestion will become a huge issue.
  2. The issue will be freight rates which run parallel to oil prices.
• Mercury emissions may cause 14 plants to be shut down (-20 MTPA).
• THE SUPPLY GAP WILL WIDEN:  67 MTPA becomes 87 MTPA
• Climate change initiatives will force the closure of any remaining wet kilns further growing the gap!!
• Domestically, it is projected that 40 new cement plants will need to be constructed given the supply gap, the high oil prices, and the changes in construction practices driven by climate change.