Concrete Market

Y2K
By Br uce A. Suprenant and Wa rd R. Malisch

M ore than 441 million cubic yards of concrete will be placed in 2000. And
the total in-place concrete cost? A whopping $88 billion dollars. That’s
up almost 13% from 1999. Last year (see “Defining the Concrete
Market, CONCRETE CONSTRUCTION, October 1999, pp. 16–25) we developed a
method for estimating the total dollar value of cast-in-place concrete. This year,
we’ve extended the method to estimate the amount of concrete placed in foot-
ings, walls, slabs on grade, columns, and elevated slabs.
We gathered cement and concrete statistical data from several sources. Then,
with the help of the Portland Cement Association and R.S. Means, a company
specializing in estimating and analyzing construction costs, we developed a
methodology for defining the concrete market.

Estimating the total dollar value

We took the following steps to determine the total dollar value of concrete:
■ Obtained cement consumption data for each construction-market segment
■ Used industry information to convert cement consumption into the num-
ber of cubic yards of concrete
■ Estimated the material and labor costs to place a cubic yard of concrete for
different types of construction. These costs included form materials and
installation, reinforcing materials and installation, and concrete materials
and installation
■ Estimated the mix of construction types for each market segment
■ Multiplied the cubic yards of concrete by the in-place cost per cubic yard
to obtain the total dollar value of the concrete market
 The demand for in-place
c o n c rete is on the rise. But where
is all that concrete going?
 We then compared the total dollar
value with U.S. Census Bureau figures
for annual total value of in-place construc-
tion for each market segment (see “Value
of In-Place Construction”).
P o r tland-cement consumption
In 2000, cement consumption will
exceed 100 million metric tons, with
about 90% of all cement production
being used in construction. Using U.S.
Geological Survey (formerly Bureau of
Mines) reports for cement shipments,
PCA estimates the amount of cement
used in different market segments and
forecasts the expected cement consump-
tion in future years (see table below).
Using this data, we made some assump-
tions that enabled us to estimate the
size of the ready-mixed concrete mar-
ket. We include paving concrete pro-
duced at an onsite plant in this market.
How many cubic yards?
PCA’s forecast is the starting point
for calculating the number of cubic
yards of concrete placed by contrac-

Por tland-cement for ecast

E ach year, the Portland

Cement Association’s
Market Research group
reports on the use of
portland cement by state
and market, applying an
“apparent use” method-
ology developed and re-
fined over the years. The
cement produced for a
given year is allocated
to various construction
markets in accordance
with the U.S. Geological
Survey report of state
cement shipment records.
The allocation is accom-
plished by determining
construction activity in
each county (using F.W.
Dodge and a variety of
other sources), applying
cement usage factors,
and adjusting the state
totals to the reported
U.S. Geological Survey
totals.
Based on 1999
Apparent Use of
Portland Cement
by State and Market,
William Toal, chief econ-
omist at PCA, forecasts
consumption will dip
slightly in 2001, remain
flat in 2002, and rise
portland cement con- slightly in 2003. Cement
sumption for future usage in the residential
years. The table below market, Toal believes,
gives this forecast infor- will remain below cur-
mation by market seg- rent highs for the next 3
ment through 2003. years.
Consumption figures in For more informa-
the table’s market cate- tion about cement usage,
gories account for about contact Toal at PCA
90% of all cement used (847-966-6200) or visit
in any given year. Toal the PCA Web site at
predicts overall cement www.portcement.org.

Portland-cement consumption by market segment

(Thousands of metric tons)
1999 2000 2001 2002 2003

TOTAL 92,819 100,756 99,521 100,058 102,716

RESIDENTIAL BUILDINGS 22,309 22,613 20,581 20,145 20,772

New housing units 20,757 20,977 18,914 18,451 19,042
Single-family 18,814 18,975 16,998 16,612 17,097
Multifamily 1,943 2,002 1,916 1,839 1,945
Improvements 1,552 1,636 1,667 1,694 1,731

NONRESIDENTIAL BUILDINGS 21,517 22,098 22,040 22,574 24,125

Industrial 2,611 2,938 3,000 3,250 3,750
Office 4,521 4,620 4,680 4,860 5,100
Hotels/motels 1,694 1,293 1,293 1,321 1,418
Hospitals/institutions 1,589 1,568 1,568 1,683 1,898
Religious/commercial/misc. 11,102 11,680 11,500 11,460 11,960

PUBLIC CONSTRUCTION 48,993 56,045 56,900 57,339 57,819

Buildings 6,891 7,350 7,413 7,475 7,663
Highways/streets 32,160 38,400 38,800 38,960 38,800
Military 93 108 130 154 168
Conservation 1,800 1,925 1,960 2,030 2,100
Sewer systems 3,583 3,510 3,555 3,600 3,780
Water-supply facilities 3,098 3,364 3,422 3,480 3,596
Miscellaneous 1,368 1,388 1,620 1,700 1,713
tors. But to convert cement tonnage to
cubic yards of ready-mixed concrete,
we needed to estimate the following:
■ Percentage of cement used in ready-
mixed concrete
■ Cementitious-materials content per
cubic yard of concrete
■ Proportion of portland cement and
fly ash in the cementitious material
Assumptions. The U.S. Geological
Survey reports separate cement usage
into market segments, most of which
are served by the ready-mixed concrete
industry. The survey also gives the per-
centage of cement used in manufac-
tured products, soil cement, and mining
or oil well applications, but we didn’t
include those segments in our estimates.
With input from Mark Justman,
PCA director of market research, we
estimated that ready-mixed concrete
consumes 85% of the cement used in
construction, except for highways and
streets, where the value is estimated to
be 92%. We used these numbers to cal-
culate the amount of ready-mixed con-
crete that contractors put in place.
We estimated the average cementi-
tious content for each market segment
to be: Ready-mixed
■ 376 pounds per cubic yard for resi-
dential (four-sack mix) c o n c rete con-
■ 470 lbs/cy for nonresidential (five-
sack mix) sumes 85% of
■ 564 lbs/cy for public construction
(six-sack mix) the cement used
However, part of the cementitious
content is fly ash. To estimate the in constru c t i o n ,
amount of fly ash used, PCA surveyed
about 250 ready-mixed concrete pro-
ducers in 1996. Justman said the survey
except for
showed 55% of the producers’ concrete
contained fly ash, and the average h i g hways and
amount of fly ash in the concrete was
about 19%. Based on these values, we s t re e t s , w h e re
assumed the average fly-ash content for
all concretes to be 10% of the total the value is
cementitious content.
We then performed two calcula- estimated to
tions to estimate the total number of
cubic yards for each market segment: be 92%.
1. Multiplied the PCA cement con-
sumption forecast for each market seg-
ment, except highways and streets, by

Table 1. Ready-mixed concrete by market segment

(Thousands of cubic yards)
1999 2000 2001 2002 2003

TOTAL 409,208 441,358 433,117 434,950 446,802

RESIDENTIAL BUILDINGS 123,596 125,280 114,022 111,607 115,086

New housing units 114,997 116,216 104,787 102,222 105,496
Single-family 104,233 105,125 94,172 92,034 94,720
Multifamily 10,765 11,091 10,615 10,188 10,776
Improvements 8,598 9,064 9,235 9,385 9,590

NONRESIDENTIAL BUILDINGS 95,253 97,829 97,573 99,933 106,803

Industrial 11,559 13,006 13,281 14,387 16,601
Office 20,014 20,452 20,718 21,515 22,577
Hotels/motels 7,499 5,724 5,724 5,848 6,277
Hospitals/institutions 7,034 6,941 6,941 7,450 8,402
Religious/commercial/misc. 49,147 51,706 50,909 50,733 52,946

PUBLIC CONSTRUCTION 190,359 218,249 221,522 223,410 224,913

Buildings 25,401 27,094 27,326 27,554 28,247
Highways/streets 128,310 153,207 154,802 155,441 154,803
Militar y 342 398 479 568 619
Conservation 6,635 7,096 7,225 7,483 7,741
Sewer systems 13,208 12,938 13,104 13,270 13,934
Water-supply facilities 11,420 12,400 12,614 12,828 13,255
Miscellaneous 5,043 5,116 5,972 6,266 6,314
 0.85 to get the amount of cement used
In 2000, more for that segment. (We multiplied by
0.92 for highways and streets.)
2. Multiplied by 2203 to convert
than 441 million the metric tons into pounds, and
then divided by the amount of ce-
cubic yards of ment used in each of the three major
categories:
re a d y - m i x e d ■ 338 lbs/cy for residential (38 lbs of
fly ash)
■ 423 lbs/cy for nonresidential (47 lbs
c o n c rete will of fly ash)
■ 508 lbs/cy for public construction
be pro d u c e d . (56 lbs of fly ash)
Based on these calculations, we
estimated the total volume of ready-
mixed concrete produced in 1999
through 2003, as shown in Table 1 on
the previous page. The table also gives
the volume of concrete used in differ-
ent market segments. Our estimates
indicate that in 2000, more than 441
million cubic yards of ready-mixed
concrete will be produced in the
United States, with single-family
housing units alone consuming more
than 100 million cubic yards. The
largest volume of concrete in an indi-
vidual market segment, however, is in
highways and streets, which will con-
sume more than 153 million cubic
yards of concrete in 2000.

Va l u e o f i n - p l a c e c o n s t r u c t i o n
T he U.S. Census
Bureau measures the
dollar value of all con-
struction put in place
each year. The Bureau
provides historical sum-
Annual value of construction put in place in the United States–1999
(Millions of dollars)
maries and forecasts and
tracks the dollar value
monthly. Our estimate
of the concrete market,
listed under “Concrete
Work” below, can be
Total
construction1
compared to the U.S.
Census Bureau’s value of
construction put in place
concrete. You can find
the annual value of con-
struction put in place at
to determine the average www.census.gov/ftp/pub/
percent of the construc- const/www/c30index.
tion market made up of html.
Concrete Concrete, % of
work2 total construction

TOTAL 707,493 79,639 11.3

RESIDENTIAL BUILDINGS 348,826 27,933 8.0

New housing units 249,53 25,990 10.4
Single-family 222,280 23,557 10.6
Multifamily 27,256 2,433 8.9
Improvements 99,290 1,943 2.0

NONRESIDENTIAL BUILDINGS 185,994 19,929 10.7

Industrial 34,894 2,294 6.6
Office 46,570 4,198 9.0
Hotels/motels 15,939 1,573 9.9
Hospitals/institutions 13,624 1,555 11.4
Religious/commercial/misc. 74,967 10,309 13.8

PUBLIC CONSTRUCTION 172,673 31,777 18.4

Buildings 77,690 5,614 7.2
Highways/streets 53,532 21,025 39.3
Military 2,111 49 2.3
Conservation 6,003 836 13.9
Sewer systems 11,181 1,893 16.9
Water-supply facilities 7,602 1,637 21.5
Miscellaneous 14,555 723 5.0

1. Numbers from the U.S. Government.

2. Numbers from concrete work based on the procedure described in this article.
In-place concrete costs for types of constr uction
B elow are R.S. Means’
in-place concrete cost
estimates for some typi-
cal types of construction.
It’s hard to define “typi-
cal” for the national con-
struction market. How-
ever, using different as-
as assuming a home size
of 1800 rather than
2000 square feet for resi-
on the overall average
in-place concrete cost.
All figures below are for
sumptions for the various dential construction, cost per cubic yard of
construction types, such would have little effect concrete.

Residential Construction
2000 square feet, two stories, 28x36-foot foundation
Forms Placing & finishing Reinforcing
Year Material Labor Material Labor Material Labor Total

1999 $17.38 $101.95 $70.86 $35.62 --- --- $226

2000 $20.03 $103.23 $73.63 $36.07 --- --- $233
2001 $18.40 $106.72 $75.96 $39.84 --- --- $241

Commercial Building Substructure

19,200 square feet, three stories, 80x80 feet, 20-foot column spacing
Forms Placing & finishing Reinforcing
Year Material Labor Material Labor Material Labor Total

1999 $11.72 $69.50 $72.14 $39.21 $2.66 $3.25 $198

2000 $13.50 $70.38 $75.80 $39.70 $2.58 $3.29 $205
2001 $12.40 $72.76 $78.20 $43.85 $2.78 $3.63 $214

Commercial Building Superstructure

19,200 square feet, three stories, 80x80 feet, 20-foot column spacing
Forms Placing & finishing Reinforcing
Year Material Labor Material Labor Material Labor Total

1999 $38.43 $202.00 $68.50 $41.41 $35.46 $38.28 $424

2000 $44.28 $204.55 $73.15 $41.93 $34.36 $38.76 $437
2001 $40.67 $211.46 $75.47 $46.32 $37.00 $42.81 $454

Concrete Pavement
24 feet wide, 12 inches thick; slipformed; includes joints, finishing, and curing
Forms Placing & finishing Reinforcing
Year Material Labor Material Labor Material Labor Total

1999 --- --- $69.65 $2.61 $6.67 $9.26 $88

2000 --- --- $74.42 $2.68 $6.47 $9.49 $93
2001 --- --- $76.68 $2.96 $6.97 $10.48 $97

Highway Bridge
120 feet long, three spans, composite steel/concrete deck, no piles
Forms Placing & finishing Reinforcing
Year Material Labor Material Labor Material Labor Total

1999 $28.72 $169.40 $70.22 $35.45 $73.93 $88.81 $467

2000 $29.07 $168.98 $73.75 $35.36 $71.64 $88.43 $467
2001 $26.70 $186.66 $76.09 $39.06 $77.15 $97.68 $503
Calculating the dollar market
R.S. Means developed in-place con-
crete cost estimates for the following
construction types:
■ Residential
■ Commercial–substructure (all con-
crete at or below the first floor)
■ Commercial–superstructure
(all concrete above the first floor)
■ Highways and streets
■ Bridges
To find the total market value,
we multiplied in-place costs per cubic
yard (see “In-Place Concrete Costs for
Types of Construction” on the previ-
ous page) by the estimated cubic
yards used for each market segment
(Table 1). Instead of using an overall
average in-place cost to calculate the
total market value, we used the in-
place cost for each separate work
function: forms, reinforcing, and con-
crete. Doing it this way still allows us
to sum the individual costs to get the
total dollar volume, but also gives us
the percentage of this total dollar vol-
ume that’s paid for forming, reinforc-

Where does all that concrete go?

L ast year’s article,

“Defining the Con-
crete Market,” provided
estimates of the total
dollar value and of the
ready-mixed concrete
for each market seg-
ment. But the question
asked most often by
readers was: “Where
does all that concrete
go?” Both manufactur-
ers and contractors
wanted to know how
much concrete was used
in footings, walls, slabs
on or above grade, and
columns. We were able
to perform calculations
to answer that question.
The table below
shows the volume of
concrete in footings,
walls, slabs on grade,
columns, and elevated
slabs for all market seg-
ments in residential,
nonresidential, and pub-
lic construction. To get
these numbers, we used
the amount of ready-
mixed concrete in each
market segment (Table
1), the assumed mix of
construction types for
each market segment,
and R.S. Means’ con-
crete breakdown for
each typical construc-
tion type (see “Assumed
Mix of Typical Con-
struction Applications”
on page 23 of the Oct-
ober 1999 article).
The concrete break-
down for each construc-
tion type is:
■ Residential: 13%
footings, 53% walls,
28% slabs on grade, 6%
site (driveways, side-
walks, patios)
■ Commercial–sub-
structure: 37% footings,
24% walls, 39% slabs
on grade
■ Commercial–
superstructure: 83%
elevated slabs, 17%
columns
For example, we
estimated that about
20,452,000 cubic yards
of concrete will be
placed in office build-
ings in 2000. Based on
R.S. Means’ assumed
mix of construction
types, 5% of this con-
crete is used in the
superstructure (about 1
million cubic yards of
concrete in elevated
slabs and columns) and
95% in the substructure
(about 19.4 million
cubic yards of concrete
in the footings, walls,
and slabs on grade).
Of the estimated 1
million cubic yards in the
superstructure, 83%
(about 830,000 cubic
yards) will be placed in
elevated slabs, and 17%
(about 170,000 cubic
yards) will be placed in
columns. Of the estimat-
ed 19.4 million cubic
yards in the substructure,
37% (about 7.2 million
cubic yards) will be
placed in footings, 24%
(about 4.7 million cubic
yards) will be placed in
walls, and 39% (about
7.6 million cubic yards)
will be placed in slabs on
grade.
This calculation was
performed for each mar-
ket segment, and the
results were summed to
get the total cubic yards
used in each structural
element.
In addition to the
concrete being used in
buildings, 144,378,000
cubic yards are being
used in paving, 7,516,800
cubic yards in residential
site work, and 31,351,000
cubic yards in bridges in
the year 2000.
Using the numbers
in the table, you can
also assume a wall or
slab thickness and calcu-
late the square feet of
wall or slab-on-grade
surface for residential,
nonresidential, or public
construction.

Where is all that Y2K concrete going?

(Cubic yards for each structural element)

Residential Nonresidential Public Summary

Footings 16,286,400 15,652,640 14,729,900 46,668,940

Walls 66,398,400 9,782,900 9,554,600 85,735,900
Slabs on grade 35,078,400 15,652,640 15,526,100 66,257,140
Columns --- 9,782,900 460,600 10,243,500
Elevated slabs --- 46,957,920 2,248,800 49,206,720
Total 117,763,200 97,829,000 42,520,000 258,112,200
Highways and streets
will consume more Table 2. The concrete construction market
than 153 million (Millions of dollars)
1999 2000 2001
cubic yards of con-
Forms–material 4,683 5,540 4,898
c rete in 2000. Forms–installation 27,427 29,088 29,352
Reinforcing–material 3,364 3,773 4,106
ing, and concrete. We followed this Reinforcing–installation 4,171 4,863 5,427
procedure for each market segment, Concrete–material 29,001 32,900 33,305
then summed the individual market Concrete–installation 10,993 11,602 12,414
segments to get the total dollar value Total 79,639 87,766 89,502
for concrete work. Table 2 shows the
estimated total dollars in the concrete
construction market for 1999, 2000, each market segment. We used elevated slabs for buildings (see
and 2001. the same assumptions as last year. “Where Does All That Concrete
Assumed mix of typical construc- For more information and details, Go?” on the previous page). These are
tion applications. R.S. Means is a see page 23 of the October 1999 the numbers that many readers have
member of the Construction Mar- article. asked us to provide. Whatever your
ket Data group that collects infor- specialty—concrete contracting,
mation on the mix of building types Extending the estimates foundations, joint sawing, forming,
using concrete. Based on its experi- We’ve also estimated the volume or floors, you can use the numbers to
ence, R.S. Means estimated the mix of concrete that’s placed in footings, estimate your share of the national
of typical construction types for walls, slabs on grade, columns, and concrete market. ■

Publication #C00K030
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All rights reserved