Cement Makers Not Looking for Quick Recovery

A housing recovery isn't likely to begin until the middle of next year at the earliest, according to the chief economist for the trade group representing U.S. and Canadian cement makers. Edward Sullivan of the Portland Cement Association, Skokie, Ill., said for the market to begin rebounding, there must be a "meaningful recovery" in sales and a corresponding reduction in unsold inventory. "Housing construction activity cannot begin until sales recover," Mr. Sullivan said in PCA's latest Economic Research report. "Increased foreclosures, coupled with deteriorating labor markets and tight credit conditions, will delay significant sales activity until mid-2010. Improvements in housing starts are not expected to be significant until 2011." The economist said that be expects the housing recovery bill, along with bank efforts to rewrite toxic mortgages, will help slow foreclosures over the next 18 months. But he also predicted that the weak labor market and declining house prices will lead to a net increase in repossessions, which will be added to the housing inventory. Furthermore, Mr. Sullivan said, unless Uncle Sam injects more cash into the banking system, tighter credit standards will serve as another drag on housing. "Under such a scenario, the housing recovery and overall economic recovery could be delayed significantly," he said.