Posted by: nedpelger | July 8, 2008

World Construction: Look at the Cement

The number of construction projects I saw in India and Bali astounded me. At every few turns another set of bamboo scaffolding would come into view. Of course I’ve read how those economies are booming, but I was fascinated to see it for myself.

The chart below shows cement production (not use as it wrongfully states) in countries throughout the world. Since most of the cement gets used near the production location, though, the graph shows some powerful information.  The large amount of wood and steel construction in America vs much of the rest of the world also skews things a bit…but still.

When the newspapers carry stories about inflation for construction materials being driven by China and other Far East countries, I’m no longer as skeptical.

One great thing about construction work, though, is that it can’t be easily outsourced. No one is going to build a building in China and ship it to Poughkeepsie.  So the cost of materials may rise, but if we are to construct buildings in America, the work will be done in America.

Most people I talk with are not experiencing much of a slow down in construction work at this time. How are you finding things now?

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Responses

  1. Lot’s of jobs but many delayed starts.

  2. You say that construction work can’t be shipped overseas, but surprisingly construction is increasingly outsourced: from structural steel for stadiums and buildings pre-fabricated in India and China to concrete bridge decking trucked up from Mexico.

    You might be interested as well that a surprising amount (more than a quarter) of cement and clinker consumed in the US is imported (US Dept of Commerce estimate) and the biggest source country is China (12.8 million metric tons in 2006).

    We think it can’t happen in construction, but globalization happens. It will be interesting to see if rising fuel prices reverse this trend and shift prefabrication jobs back to the US because of higher shipping costs.

    Another interesting fact is that globally cement production is the source of an estimated 10% of all carbon dioxide emissions. It takes a lot of fuel to run those kilns. As you point out a lot of that comes from China. It’s a small world and we’re all in this boat together.


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