Regional Update

Dave Zwicke, Sr. Director & Regional Economist

April 2021
Potential Changes to Spring Regional Outlook
Total cement consumption based on sum of states, Winter 2020/21 vs. upcoming Spring 2021

2021 2022 2023 2024 2025

Total Cement -- --
Residential Cement --
Commercial Cement
Oil Well Cement -- --
Agriculture Cement -- -- -- -- --
Public Cement -- -- --

Upward No material Downward

Revision -- Change Revision
 Based on IHME’s
reported
estimated
IHME Daily Infection – United States infections

400,000

350,000

300,000
January 2021
Outlook
250,000
April 2021
200,000
Outlook
150,000

100,000

50,000

0
2/21/2020 4/21/2020 6/21/2020 8/21/2020 10/21/2020 12/21/2020 2/21/2021 4/21/2021 6/21/2021

Source: IHME 3
 Based on IHME’s
reported
estimated
IHME Daily Infection – West Census Region infections

120,000

January 2021
100,000
Outlook
80,000
April 2021
Outlook
60,000

40,000

20,000

0
2/21/2020 4/21/2020 6/21/2020 8/21/2020 10/21/2020 12/21/2020 2/21/2021 4/21/2021 6/21/2021

Source: IHME 4
 Based on IHME’s
reported
estimated
IHME Daily Infection – Midwest Census Region infections

120,000
April 2021
100,000 Outlook

80,000

60,000

40,000

January 2021
20,000
Outlook
0
2/21/2020 4/21/2020 6/21/2020 8/21/2020 10/21/2020 12/21/2020 2/21/2021 4/21/2021 6/21/2021

Source: IHME 5
 Based on IHME’s
reported
estimated
IHME Daily Infection – Northeast Census Region infections

160,000

140,000

120,000

100,000

80,000 April 2021 January 2021

Outlook Outlook
60,000

40,000

20,000

0
2/21/2020 4/21/2020 6/21/2020 8/21/2020 10/21/2020 12/21/2020 2/21/2021 4/21/2021 6/21/2021

Source: IHME 6
 Based on IHME’s
reported
estimated
IHME Daily Infection – South Census Region infections

120,000

100,000
January 2021
April 2021 Outlook
80,000
Outlook

60,000

40,000

20,000

0
2/21/2020 4/21/2020 6/21/2020 8/21/2020 10/21/2020 12/21/2020 2/21/2021 4/21/2021 6/21/2021

Source: IHME 7
 Share of Jobs Recovered
Job growth as share of total losses from the COVID recession trough
• Employment recovery remains on
70%
track.

60% • Job growth will likely exceed

January expectations given
50% higher than anticipated vaccine
rollout.
40%
• Job recovery in West is improving
30% at twice the national rate in recent
months – however, from a lower
20% base.

10%

0% Through January Through March

Northeast Midwest South West
8
Source: PCA, NAR
 Housing Market Remains Very Tight
Months Supply of existing homes on market Regional housing supply
12

10 Adequately
supplied

6
Under-
supplied
4

2
Severely
Under
Supplied
0
1999 2002 2005 2008 2011 2014 2017 2020
Source: Census Bureau, Moody’s Analytics
Source: NAR

9
 Single Family Housing Starts Vs. Permits
units

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0
2007 2010 2013 2016 2019 2022 2025

Source: PCA, U.S. Census Housing Permits Housing Starts 10

 Residential Cement Consumption
Share of total cement state cement consumption 40% or
Greater
WA

NH ME
MT VT
ND

OR
MN

ID
SD NY MA 30% to 40%
WI
WY MI RI
CT

IA
PA
NE NJ
NV OH
UT IL
IN DE 20% to 30%
CO WV MD
CA VA
KS
MO KY

NC
TN
AZ OK 19% or less
NM AR SC

AL GA
MS
LA
TX

FL

Source: PCA 11
 Commercial Cement Consumption
Share of total cement state cement consumption (2019) 15% or
Greater
WA

NH ME
MT VT
ND

OR
MN

ID
SD NY MA 10% to 14%
WI
WY MI RI
CT

IA
PA
NE NJ
NV OH
UT IL
IN DE 5% to 9%
CO WV MD
CA VA
KS
MO KY

NC
TN
AZ OK 4% or less
NM AR SC

AL GA
MS
LA
TX

FL

Source: PCA 12
 Oil & Gas Drilling Continues as a Regional Concern
2Q Moving Average

2,500 120

100
2,000 WTI
Price 80
1,500 (R)
60

1,000
40

500 20
Active Rig
Count (L)
0 0

Source: Baker Hughes Incorporated, EIA 13

 Oil Well Cement Consumption
Share of total cement state cement consumption (2019) 20% or
Greater
WA

NH ME
MT VT
ND

OR
MN

ID
SD NY MA 11% to 19%
WI
WY MI RI
CT

IA
PA
NE NJ
NV OH
UT IL
IN DE 1% to 10%
CO WV MD
CA VA
KS
MO KY

NC
TN
AZ OK Less than 1%
NM AR SC

AL GA
MS
LA
TX

FL

Source: PCA 14
 Oil & Gas Drilling remain a Regional Concern
Average Active Rotary Rigs - Total, (#)
Rig CountDecline from March 2020:
160 Wyoming -75%
North Dakota -74%
140 Oklahoma Oklahoma -61%

120

100

80 North Dakota
60

40

20
Wyoming
0
Jan-16 Jul-16 Jan-17 Jul-17 Jan-18 Jul-18 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21
Source: Baker Hughes Incorporated, EIA 15
 Percent Change from March 2020
Trough Current
Texas -74% -48%
Oil & Gas Drilling Outlook Improving New Mexico -61% -44%
Average Active Rotary Rigs - Total, (#)
120
600

100
500
Texas 80
400

60 New
300
Mexico
40
200

20
100

0
0

Source: Baker Hughes Incorporated, EIA 16

 State Funding – FY2021
Percent Declines in General Fund Tax Revenues from Pre-COVID Levels (Preliminary)

WA
On a state weighted
basis, 2021 general MT
ND VT
NH ME
States with high
fund revenues are
OR
MN
exposure to oil &
expected to decline
ID
SD
WI
NY MA
RI
tourism revenues are
WY

13% as reported by
MI
CT
at most risk
IA
PA
NE NJ
state agencies NV
UT IN
OH
DE
IL
CO WV MD
CA VA
KS
MO KY

TN
NC
Last updated August
AZ OK
NM AR SC 24th from reports
MS
AL GA ranging between April
TX
LA through August.
FL

No Data 21% to 26% 16% to 20% 11% to 15% 6% to 10% 1% to 5%

17
Source: Center on Budget and Policy Priorities: Data compiled from various state agencies
 State Funding – FY2021
Percent Declines in General Fund Tax Revenues from Pre-COVID Levels

WA
On a state weighted NH ME
MT
basis, 2021 general ND VT

OR
fund revenues are ID
MN
MA
SD NY
expected to decline WY
WI
MI
RI
CT
3.3% as reported by IA
PA
NE NJ
state agencies NV
UT IN
OH
DE
IL
CO WV MD
CA VA
KS
MO KY

NC
TN
AZ OK
NM AR SC

AL GA
MS
LA
TX

FL

21% to 26% 16% to 20% 11% to 15% 6% to 10% 1% to 5% Revenue

Growth
18
Source: Center on Budget and Policy Priorities: Data compiled from various state agencies
Employees returning to Work: U.S.
Percentage change from baseline visits—Workplace Workplaces: Mobility
10 trends for places of work

-10
As of: 2/2/21
-20

-30

-40

-50 Thanksgiving Holiday

Memorial 4th of Labor Day
Day July Season

-60
02/21/20 04/21/20 06/21/20 08/21/20 10/21/20 12/21/20 02/21/21 04/21/21

Source: Google Mobility Report, PCA 19

Employees returning to Work: U.S.
Percentage change from baseline visits—Workplace Workplaces: Mobility
10 trends for places of work

-10
As of: 2/2/21
-20

-30
Current
-40

-50 Thanksgiving Holiday

Memorial 4th of Labor Day
Day July Season

-60
02/21/20 04/21/20 06/21/20 08/21/20 10/21/20 12/21/20 02/21/21 04/21/21

Source: Google Mobility Report, PCA 20

 Public Cement Consumption
Share of total cement state cement consumption (2019) 60% or
Greater
WA

NH ME
MT VT
ND

OR
MN

ID
SD NY MA 50% to 59%
WI
WY MI RI
CT

IA
PA
NE NJ
NV OH
UT IL
IN DE 40% to 49%
CO WV MD
CA VA
KS
MO KY

NC
TN
AZ OK 39% or less
NM AR SC

AL GA
MS
LA
TX

FL

Source: PCA 21
 Regional Update
Dave Zwicke, Sr. Director & Regional Economist
April 2021