GDP

GLOBAL CEMENT: TRENDS
Emma Davidson, Research Associate, Global Cement Magazine
Defining the trend: Cement consumption
versus Gross Domestic Product
The GDP versus Cement Consumption graph (See
Figure 1) is a striking visual representation of a
country’s stage of development. Emerging nations,
such as China, South Korea and Saudi Arabia, are
instantly recognisable. Their cement demand is often
far in excess of countries with comparable GDPs and
is representative of the significant national invest-
ments in infrastructure taking place in these areas.
By contrast, smaller economies with low GDPs
and little or no infrastructure investment have
small cement consumptions and densely populate
the lower end of the graph. The more established
economies, for example the US and those in Western
Europe, have cement consumptions in line with these
less affluent nations since large investments in infra-
structure and urbanisation have already taken place.
The relationship between GDP and cement con-
sumption, plotted by multiple sources and years,
shows a general inclination towards a cement con-
sumption of 600kg per capita or less in nations with
per capita GDPs in excess of US$25,000. This pattern
is usually represented by a trend line with a steady
incline that reaches a plateau or declines gradually
once the GDP reaches that threshold. In most years,
the majority of data points can be fitted to this model,
however, there are a few regular exceptions.
Exceptions to the rule in 2012
Singapore: Singapore has been consuming ce-
ment at very high rates for a considerable
period of time. With cement output so low it is neg-
ligible, cement represents a significant proportion of
national imports.10
Cement consumption in the coun-
try reached 958kg/capita in 2002, over
three times the world average for that
year, although the GDP had yet to
breach the US$25,000 mark. When the
economy finally exceeded US$25,000/
capita in 2005, cement consumption had
decreased considerably and barely exceeded the ob-
served ‘limit’ of 600kg at 690kg/capita. The same was
true in 2007, although growth in multiple sectors18
meant that GDP continued to increase significantly
to US$36,766/capita.
2008 was the first year in which Singapore truly
placed its head above the parapet and exceeded the
observed ‘limits’, with a consumption rate of 940kg/
capita and GDP of US$36,972/capita. This increased
cement demand resulted from growth in the con-
struction sector driven by an increase in both public
and private projects20 including the completion of the
F1 site ahead of the Singapore Grand Prix.19
The post 2008 market remained relatively buoy-
ant, with cement consumption only dipping briefly
to 820kg/capita in 2010, still twice the world aver-
age for that year. This consumption was driven by
an increase in public sector spending on projects
including public housing and the
MRT Downtown Line.12 GDP
too continued to increase
despite the financial cri-
sis, although growth was
much reduced, down to
just +1.1% compared
to increases of 7-9%
between 2004
and 2006.11
DRAFT GlobalCementMagazineJune2014 www.GlobalCement.com
Growth in Gross Domestic Product (GDP) per capita, a measurement of the average
national standard of living, can be a contributing factor to cement demand. Increased
industrialisation caused by economic expansion has a tendency to drive corresponding
increases in cement consumption. This relationship is well known and has been widely used
in the past to both judge the relative economic growth between nations and forecast likely
cement consumption rates as a given nation’s GDP increases. It is this latter use that the
current article focuses on, examining the relationship of the two variables in detail across
multiple years to assess the relevance of the measures as an accurate forecasting tool.

The country’s per capita GDP in 2010 was
twice that of 2002 and resulted partly from
the government’s investment in economic
development; an ongoing commitment that
accounted for 21.1% of estimated government
expenditure in 2010.14
In 2012 cement consumption reached a
substantial 1035kg/capita, driven in part by
a total national spend of US$20.4bn on con-
struction. The next five years are expected to
see a further increase as public sector projects
including hospitals, colleges and highway de-
velopments get underway.13 This, coupled with
a GDP/capita that exceeded US$50,000 for
the first time in 2012, suggests that Singapore
will remain an outlier in the GDP versus ce-
ment consumption model for at least the next
few years.
UAE: For over a decade, both GDP and ce-
ment consumption in the UAE have exceeded
the threshold values identified by this re-
search. Even a significant decrease in both
following the financial crisis failed to bring
UAE consumption figures in line with GDP
contemporaries such as the UK, which had
a consumption eight times smaller than the
UAE in 2010.
The trend towards this very high cement
consumption prior to the financial crisis – the
UAE consumed a staggering 4365kg/capita
in 2008 – was driven by investments in am-
bitious architectural projects. These in turn
drove GDP since they attracted considerable
attention from both the tourism and business
property sectors.15 This meant that,
when the financial crisis hit, it hit
hard. Construction companies that
had invested heavily in the boom
were suddenly unable to meet finan-
cial commitments.16
The UAE’s cement consumption
more than halved between 2008 and
2010. Yet the UAE remained an out-
lier despite this substantial hit. GDP
never fell below US$34,000 and the
consumption level remained above
600kg per capita. By 2012 GDP had
regained pre-crisis levels thanks to
government diversification and in-
vestment programmes and a young
population that drove both the prop-
erty and infrastructure markets.16
By contrast, cement consumption
in the same year plummeted to
990kg/capita, the lowest rate in over
a decade.
www.GlobalCement.com GlobalCementMagazineJune2014 DRAFT
Cementconsumption(kg/capita)
3000
2750
2500
2250
2000
1750
1500
1250
750
500
250
0
1000
0 20,000 40,000 60,000 80,000 100,000
GDP/capita (US$)
Qatar
Norway
Saudi Arabia
Singapore
UAE
Switzerland
Australia
China (Official)
South Korea
Denmark
Iran
Spain
Italy
Israel
Turkey
Malaysia
Poland
Russia
Greece
PortugalCz.
Iceland Belgium
Austria
Japan Canada
USA Sweden
France
Germany
UK
China (Realistic)
Morocco
Vietnam
Zambia
India
Pakistan
Egypt
Jordan
Rom.
S Africa
Brazil
Mexico
Left:The Singapore skyline
during the city state’s
now well-established FIA
Formula 1 Grand Prix.
Left:The Burj Khalifa in Dubai,
UAE, the world’s tallest building.
Below - Figure 1: GDP/capita
(US$) and cement consump-
tion (kg/capita) for a variety of
countries in 2012.

A recent report by the Dubai Chamber of Com-
merce and Industry suggests this is all set to change.
The report predicts an expansion in the value of the
construction industry, projecting that an increase of
0.6 million in the expatriate population will drive
growth in both the residential and commercial prop-
erty markets.17 This ought to ensure that the UAE
maintains a position as an outlier on the graph for
the foreseeable future.
Qatar: The Qatari position with regards to the GDP
versus cement consumption graph has remained
steadily in excess of nearly every other nation for
over a decade. This is hardly surprising given that the
country has the fastest GDP growth in the world22
and a low population size.
In 2003 the country’s 3314kg/capita cement
consumption was comparable to that of the UAE,
although Qatar’s GDP was far greater at US$52,414/
capita. A construction boom between 2006 and 2012
continued to drive the GDP even higher and was also
responsible for a staggeringly high cement consump-
tion rate that peaked in 2008 at 4242kg/capita.
In stark contrast to the UAE, the
Qatari economy remained relatively
resilient during the financial downturn.
Between 2008 and 2010, GDP dropped
from US$84,628/capita to US$71,510/
capita while cement consumption took
a relatively minor hit, decreasing by ap-
proximately 10%. This buoyancy was
attributed to continued government
investments designed to stimulate the
financial sector22 and meant that by 2012
GDP per capita had recovered to a huge
US$103,900. In contrast, cement con-
sumption in the same year decreased far
more than it had even at the peak of the
crisis, falling from 4254kg/capita in 2010
to 3023kg/capita in 2012.
Despite this, Qatar looks set to main-
tain its position as a significant global
consumer of cement. A successful bid
for the 2022 FIFA world cup means that
there are a number of large infrastructure
investments on the order books, with the
government reportedly assigning 40% of
its 2012-2016 budget to projects includ-
ing a transport corridor to the capital and
a new international airport.22 The Com-
mercial Bank Capital predicts that these
projects will see cement consumption
in the country peak during 2013/2014.20
This, coupled with a GDP that is pre-
dicted to reach US$112,000/capita by
2016,22 suggests that Qatar will continue
to trend as an outlier on the GDP versus
cement consumption graph.
Saudi Arabia: Unlike the other outliers
discussed above Saudi Arabia only exceeded a GDP
of US$25,000/capita alongside a cement consump-
tion rate of 600kg/capita in 2012. Having started the
10 year period from the 2002 with a consumption
rate three times greater than the 2002 world average
at 953kg/capita; in contrast, the world average GDP
for that year was barely three quarters that of Saudi
Arabia’s. Both measures continued to rise steadily
throughout the next decade, placing Saudi Arabia
firmly in the bracket of ‘emerging nation’ alongside
contemporaries such as China and South Korea.
The blow of the financial crisis fell wide of both
Saudi GDP and cement consumption, with GDP
falling by US$385/capita and cement consumption
falling by 103kg/capita between 2008 and 2010.
Underpinned by a boom between 2004 and 2008,
the entire Saudi Arabian economy fared relatively
well, propelled by both government spending and
economic activity throughout 2009 that promoted a
strong performance in the banking sector.23
Saudi Arabia’s cement consumption further
increased to 1700kg/capita in 2012, up from
GDP/capita (US$)
900
800
700
0
1000
0 20,000 40,000 60,000 80,000 100,000
Norway
Austria
NL
UAE
Switzerland
Australia
South Korea
Denmark
Iran
Spain
Italy
Israel
Turkey
Russia
Ukr.
Portugal
Czech Republic
Iceland
Belgium
Finland
Japan
Canada
USA
Sweden
France
Germany
China (Realistic)
Croatia
Uganda
Vietnam
Egypt
Jordan
Mex.
Morocco
UK
Ireland
Greece
Slovakia
500
400
300
600
200
100
Poland
Thai.
Mauritius
Estonia
Algeria
Romania
Brazil
Angola
RSA
Arg.Bulg.
Ven.
Colombia
Indonesia
Malaysia
1
32
4
5 6
800
0
0 20,000 40,000 60,000
Singapore
NL
UAE
Saudi Arabia
Denmark
Turkey
Russia Portugal
Czech Republic
Finland
Canada
USA Sweden
France
Germany
China (Official)
China (R)
Uganda
Vietnam
Egypt
Jordan
Mexico
Morocco
UK
GreecePakistan
400
600
200
Poland
India
Romania
Brazil
Zambia
RSA
South Korea
10,000 30,000 50,000
GDP/capita (US$)
1600
1200
1400
1000
1800
BelgiumIceland
Austria
Japan
Israel
Italy
Spain
Iran
Malaysia
Top - Figure 2: GDP/capita
(US$) and cement consumption
(kg/capita) for a variety
of countries in 2012. Only
cement consumption values of
1000kg/capita or less are shown.
Above - Figure 3: GDP/capita
(kg/capita) for a variety
of countries in 2012. Only
GDP/capita values of US$60,000
or less are shown.

1522kg/capita in 2010,
while GDP rose by a
staggering US$12,473/
capita to US$31,800
over the same two
year period.
To date, cement
consumption in Saudi
Arabia has been driven
by investments across
the board, in areas
including industry,
infrastructure and
tourism. These pro-
jects will continue to
drive consumption, with demand expected to peak
in 2014.24 However, with a slight decrease in cement
consumption forecast for 2015 and a predicted slow-
ing in GDP growth attributed mainly to changes in
the oil sector,25 it seems unlikely that both measures
will remain so inflated when compared against the
general global trend in the future.
China: Official and realistic figures
Another significant outlier on the graph is China.
Official figures for China place the country amongst
the highest consumers of cement on the planet at
1581kg/capita. While the country is clearly expe-
riencing considerable infrastructure growth, this
figure is arguably rather unrealistic given that the
Chinese population in 2012 was 1.315 billion. A ce-
ment consumption of this size, in this population,
would correspond to a national demand of 2.04Mt, or
around 60% total global cement production capacity.
Another factor that casts doubt on the Chinese
official figures is the frequency with which even the
most rapidly developing nations consume cement at a
rate greater than 1000kg/capita.27 Whilst not unheard
of - both Saudi Arabia and Qatar have consumption
rates far in excess of 1000kg/capita – the occurrence
is relatively rare and does seem somewhat unlikely in
China, where a steadily increasing GDP is still below
that of the world average and far below those of both
Qatar and Saudi Arabia. This throws further doubt
on the health of the construction industry and the
amount of capital available to drive cement demand,
although, as the GDP is proportional to population
size, it is perhaps not the most representative meas-
ure for dealing with a nation the size of China.
Right - Figure 4:The correla-
tion coefficient (r) of GDP/capita
and cement consumption per
capita from 2002-2012. Correla-
tion factors based on data shown
inTable 1.
Source: CEMBUREAU,World Bank,
Maddison.
Country
2012 2010 2008 2007 2005 2002
GDP Cement GDP Cement GDP Cement GDP Cement GDP Cement GDP Cement
Brazil 11,340 353 10,678 314 8623 271 7194 237 4739 199 2811 212
China (Official) 6091 1581 4433 1322 3414 1036 2651 1001 1731 812 1135 562
India 1489 191 1419 131 1042 148 1069 136 740 125 487 103
Japan 46,720 400 43,118 370 37,972 446 34,095 143 35,781 631 31,236 507
Russia 14,037 402 10,710 355 11,700 430 9146 429 5337 321 2375 248
Saudi Arabia 31,800 1700 19,327 1522 19,714 1625 16,049 1056 13,303 1207 8639 953
Singapore 51,709 1035 42,784 820 36,972 940 36,766 690 28,953 690 21,691 958
South Korea 22,590 911 30,000 950 27,600 1114 25,000 955 22,600 955 19,400 1216
Spain 28,624 438 29,863 453 34,977 936 32,118 1300 26,056 1187 16,612 1067
Switzerland 78,925 560 70,370 637 68,555 601 59,664 602 51,734 601 39,350 551
UAE 49,800 990 34,049 1757 46,310 4365 44,529 3244 43,534 3254 34,062 1911
UK 39,093 206 36,703 205 43,780 203 46,848 238 38,545 210 27,322 202
USA 51,749 232 48,358 220 48,407 305 48,070 365 44,314 413 38,175 385
Qatar 103,900 3023 71,510 4252 84,628 4710 69,024 3897 52,414 3314 30,749 N/A
Finland 45,721 302 43,846 336 51,186 360 46,538 386 37,319 326 25,994 299
Norway 99,558 343 86,156 340 95,190 401 83,556 433 65,767 380 42,292 242
Vietnam 1755 560 1334 605 1165 417 919 390 696 316 477 259
Global average (Est.) 10,281 536 9307 447 9211 420 8498 416 7138 360 6262 292
Global Mean
Qatar
USA
Spain
South Korea
Japan
Vietnam
Norway
Finland
UK
UAE
Switzerland
Singapore
Saudi Arabia
Russia
India
Brazil
China (O)
0.0 +0.2 +0.4 +0.6 +0.8 +1.0-1.0 -0.8 -0.6 -0.4 -0.2
r
Below -Table 1: GDP/capita
(kg/capita) for given years.

Global Cement has previously speculated that
the unrealistically high official consumption rate in
China results from either an overestimation by the
Chinese authorities or an artificial inflation of the
construction sector through unnecessary
projects which lack genuine demand, or
indeed a combination of both.27 A more
modest figure of 610kg/capita has been sug-
gested by a peer review source.26 This seems
more likely as it equates to a still substantial
but more realistic total national consumption
of around 824Mt.
A snapshot not a long-term measure
As valuable as the GDP versus cement con-
sumption graph is in comparing the relative
economic growth of multiple nations, it is not
an appropriate forecast model. This is because
both measures can be independently affected by
a wide number of different factors. The relation-
ship in countries that regularly fall outside of the
observed ‘normal’ limits of the model demonstrates
how unrelated the two measures can become for
some countries. Cement consumption in
Singapore altered by only a small amount
between 2005 and 2007 yet GDP increased
by US$7813/capita over the same period.
Similarly cement consumption in the UAE
fell by 767kg/capita between 2010 and 2012
while GDP increased from US$34,049/
capita to US$49,800/capita.
Pearson’s correlation coefficient (r) is
a statistical measure of the interdepend-
ence of two variables. Figure 4 shows the
r values for the relationship between GDP
and cement consumption in 18 countries
between 2002 and 2012. A value of 0 in-
dicates no linear relationship between
the two while 1 is indicative of a perfect linear re-
lationship (i.e. as GDP increases so does cement
consumption). An r value of -1 suggests a perfect
negative relationship (i.e. as GDP increases cement
consumption decreases).
This analysis shows that correlation between the
two measures varies significantly between nations.
GDP and cement consumption are very strongly cor-
related in the China described by official statistics,
while the two figures have a strong negative rela-
tionship in the United States. In none of the nations
assessed did GDP prove to have no correlation with
cement consumption. However, correlation was very
low, i.e.: relatively close to 0, in five of the 18 coun-
tries investigated. These are Spain, Qatar, Japan, the
UAE and Singapore.
Positively correlated (r>0)
Assuming that the Chinese statistics are inaccurate
for the reasons discussed above, the world average
GDP and cement consumption shows the highest
positive correlation at 0.968 and indicates that the
general global trend is towards increased cement
consumption corresponding to increased GDP.
Vietnam: Vietnamese cement consumption has
remained consistently close to the world average,
increasing from 259kg/capita in 2002 to 560kg/capita
in 2012. The country’s GDP too has seen a significant
increase over the same time period, up from US$477/
capita to US$1755/capita in 2012.
Huge amounts of public capital have been invested
in both infrastructure and urbanisation projects
throughout the past few years, with the contribution
to GDP from the construction industry increasing
steadily as these projects progress.28 Approximately
9-10% of GDP was linked to investment in sanita-
tion, transport and telecommunication between
2004 and 2006. A number of microeconomic stud-
ies confirmed a connection between the Vietnamese
growth and poverty reduction and these infrastruc-
tural investments,29 effectively explaining the strong
positive correlation we observed between GDP and
consumption across the decade.
Brazil: Brazilian demand for cement between
2002 and 2012 tended towards a general increase,
although it failed to keep pace with the average speed
ofgrowthcomparedtotheglobalaverage.Conversely,
GDP has tracked faster than the global...
Right: The Maracana Stadium
in Rio de Janeiro, Brazil, is being
extensively revamped ahead of
the 2014 FIFAWorld Cup.
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...trend, starting 2002 at slightly less than 50% of the
world average and increasing to 118% by 2012.
Brazil’s high correlation between GDP and ce-
ment consumption is perhaps surprising given the
difference in growth rates for the two parameters
under consideration in this research. Brazil’s con-
sumer driven economy kept GDP relatively buoyant
throughout the financial crisis31 but GDP growth is
now acknowledged to be slowing down.30 Despite
this, per capita income continues to increase with es-
timates suggesting that as many as 40 million citizens
have risen above the poverty line since 2004.30
The country’s cement demand rose between 2007
and 2012 from 237kg/capita to 353kg/capita. This was
driven by a successful bid for the 2014 FIFA World
Cup in 2007, the Growth Acceleration Programme
(PAC) initiated in the same year and preparations for
the 2016 Summer Olympic Games.32
The high correlation between cement consump-
tion and GDP observed, then, is due to the fact that
both measures are increasing. However, whether the
twoareactuallyrelatedisdebateable.Cementdemand
and the Brazilian economy is arguably almost entirely
disassociated from GDP as the consumer products
market has little direct impact on the construction
industry. Infrastructure spending accounted for
only 1% of Brazilian GDP in 2012.33 Therefore, the
strong positive correlation between the two measures
observed in Brazil since 2002 could
be coincidental. The large economic
gains experienced by the country
throughout the last century30 do not
appear to have directly influenced
cement consumption, although
they have undoubtedly affected the
available capital for investments in
infrastructure and the bids for the
major sporting events that have
taken place recently.
The Brazilian construction industry is expected to
grow exponentially over the next five years, placing it
among the fastest growing construction markets in
the world. With GDP already slowing and expected
to decrease further,30 it seems unlikely that a similar
analysis to this in five or 10 years time would find the
two measures to be so strongly correlated.
This highlights the main issue with using the
graph as a forecasting tool. It is unable to accom-
modate external factors that independently influence
one or both of the variables.
Saudi Arabia: Saudi Arabia’s impressive GDP/capita
growth means that in 2012 it exceeded the world av-
erage by 200%. In 2002 its GDP/capita was just 130%
of the global average. Cement consumption growth
has mirrored this trend, consistently exceeding the
world average.
The Saudi economy is specialised in that the oil
sector offers a large degree of flexibility that is not
available to other countries.34 It also has a robust
tourism sector supported by two of the most popular
religious shrines in the world, Mecca and Medina.34
Increases in the oil export market in 2011 means
that a lot of oil revenue has been earmarked for
investment in the domestic economy, specifically
in housing, infrastructure and economic support
projects that have, in turn, driven cement demand in
the Kingdom.35
Negatively correlated (r<0)
United States: The relationship between GDP and
cement consumption has a strong negative correla-
tion in the US economy (-0.706). GDP/capita in 2012
was higher than 2002 while cement consumption
underwent a steady decline from 2006 onwards.
The country’s economy is based on a service
model, which meant that the financial crisis had a
significant impact. GDP/capita remained flat be-
tween 2007 and 2010 but cement consumption has
plummeted since 2008. The construction industry in
the US underwent a severe contraction in response to
the financial crisis. The result was reductions in both
residential and commercial projects, state budgets
and public works. Cement demand fell in response,
with total consumption figures in 2010 nearly half the
level of just five years before.38
The Portland Cement Association (PCA) sug-
gests that 2013 was the first year in
which this trend began to reverse,
with real construction spending ex-
pected to increase further in 2014.
The PCA also predicted that cement
consumption will regain pre-crisis
levels by 2018,36 suggesting that the
correlation between the two meas-
ures will not remain so markedly
negative in future analyses.
South Korea: The negative correlation between the
two measures is not as dominant in South Korea
as the US at -0.344 and is likely the result of a con-
struction industry that has been flailing since 2008.
Indeed, cement consumption in South Korea has
been particularly changeable. In 2002, the value was
firmly above the 1000kg/capita mark at 1216kg/capita
but had fallen to 955kg/capita by 2005. This trend has
been sustained throughout the decade as consump-
tion rates flirted with 1000kg/capita until 2010, when
a demand of 950kg/capita marked the beginning of
a decline. GDP also decreased significantly between
2010 and 2012 but, unlike cement consumption, had
risen steadily until this point.
The construction industry in South Korea has
been struggling since 2008 due in part to poor prop-
erty sales and increasingly tight lending conditions.39
This slump has been identified as a particular chal-
lenge to the industry’s growth, with analysts looking
to the 2018 Winter Olympics to offset the trend.41
www.GlobalCement.com GlobalCementMagazineJune2014
Left: Could the 2018Winter
Olympic Games be a factor in
South Korea returning to positive
correlation between cement
consumption and GDP?

South Korea operates a market economy, one with
a growth rate limited by both labour regulations and
a rapidly ageing population. With a strong focus on
exports (they account for nearly half the country’s
GDP), South Korea was hit hard by the global finan-
cial crisis but recovered within a matter of years.42
It is easy to see then why GDP and cement con-
sumption would have such a low correlation in this
example. There is a struggling construction industry
and an economy that is reliant on exports and subse-
quently market trends in other nations.
However, the correlation between the two may
not remain negative for long. With the US – Korea
Free Trade Agreement of 2011 expected to increase
the value of the export market by billions of dollars
year-on-year and the 2018 Winter Olympic Games
set to regenerate the construction industry,41 future
analysis along the lines of this study would likely find
that increases in both correspond to a more positive
correlation; whether that correlation is the result of a
direct relationship between the two measures or not.
Spain: The correlation between GDP and cement
consumption in Spain, although negative, is also very
weak at only -0.143. This is not unpredictable given
the huge changes that the country has witnessed
since its 2007 crash. An analysis of GDP and cement
consumption 10 years ago would likely have found
the two factors to be very strongly correlated. The
Spanish construction industry and economy were
both booming prior to 2007. The construction indus-
try grew quickly from 1999, registering 11% growth
in demand in 20005 and a further 5.1% increase in
2001. This growth was sustained and promoted a
year-on-year increase in cement demand that peaked
at 1300kg/capita in 2007, placing Spain among im-
probable contemporaries such as South Korea and
Saudi Arabia on some earlier consumption graphs.
GDP too increased quickly during this time, nearly
doubling between 2002 and 2007.
A difficult 2009 saw a substantial constriction of
the building industry, with a 60% fall in total residen-
tial construction projects compared to 2008 levels.
The result was a 32.9% decrease in cement consump-
tion in 2009 followed by a further 15.2% in 2010.7-8
This meant that by 2012 Spanish consumption had
decreased from 936kg/capita in 2008 to
438kg/capita.
Spain’s GDP followed a similar trend,
nearly doubling between 2002 and 2007
before declining. However, exports re-
mained relatively resilient throughout this
time and the country’s mixed economy
meant that the decline was not as marked
in GDP as in cement consumption.42 This
undoubtedly contributes to disassociation
between the parameters.
The two measures do not look set to
become correllated (either positively or
negatively) in the near future. Oficement
predicts a continued contraction in the construction
industry and noted a further decrease in per capita
cement consumption in 20132 while a modest eco-
nomic growth was recorded for the same year.42
The graphs’value as a forecast tool
The correlation between GDP and cement consump-
tion across multiple nations and years demonstrates
that both are liable to be influenced by external fac-
tors, themselves subject to variation.
GDP, as the market value of goods and services,
can be hugely impacted by factors including war, oil
incomes and other exports. In contrast, cement con-
sumption is a reflection of the demand for housing,
infrastructure and is related to a country’s level of
urbanisation. It is driven by government investments,
bids for sporting events and large-scale private sector
projects in some nations, for example Saudi Arabia,
the UAE and Qatar.
It is clear that GDP/capita and cement consump-
tion per capita do not operate in sole conjunction
with the other. There are many situations in which
growth in GDP facilitates an increase in cement
consumption, the strong correlation between the
two in emerging nations like China and Vietnam
are evidence of this. Infrastructural investments in
these nations are necessary to facilitate increases in
industrialisation, which in turn increase GDP and
facilitate progress. Likewise, there are situations in
which the growth in GDP has no bearing on con-
sumption, for example trends in the oil sector have a
huge bearing on Saudi GDP but little or no effect on
cement consumption.
This disassociation under pressure from external
factors arguably makes the use of the relationship
between the two measures an inappropriate fore-
casting tool, especially since their correlation varies
between countries. The current analysis shows that,
even within individual countries, the correlation co-
efficient is liable to change over time. However, the
mean global values are very strongly correlated and,
providing that the graph is not used to forecast likely
trends in either, it still offers a good comparison of
the relative economic position between different na-
tions at a set point in time.
GlobalCementMagazineJune2014 www.GlobalCement.com
1400
GDP/capita(US$)
2007 2008 2009 2010 2011 20122002 2003 2004 2005 2006
Year
1200
1000
800
600
400
200
0
Right - Figure 5: The slump
in Spanish per-capita cement
consumption between 2002 and
2012 (US$).

GDP

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