Limited demand boost expected from construction sector following winter storm - AGC

Author: Adam Yanelli

2021/02/23

HOUSTON (ICIS)--Demand from the construction sector is likely to see a limited boost in demand following the winter storm, but nothing as drastic as is seen following hurricanes, according to the chief economist for the Associated General Contractors of America (AGC), a trade group.

“I’ve not been seeing stories on the impact on structures other than lots of burst pipes,” said Ken Simonson, chief economist at the AGC. “People are going to have to tear out some wallboard, but we are not seeing the total destruction or ruin of structures like from hurricanes.”

Simonson said supply for some construction materials has been tight, especially engineered woods like plywood, because of resin shortages related to last summer's hurricanes.

Simonson said he could see some short-term disruptions to the supply chain on the materials side because of outages at plants that provide the chemicals needed for production.

“I do expect some short-term disruptions added on to what was already going on in terms of a very disrupted supply chain,” he said.

While a demand bump directly related to the winter storm may be minimal, Simonson said he expects to see continued demand growth in the sector as a whole.

“I don’t see any let-up,” he said. “Although, rapidly increasing prices for so many materials, and delays to deliveries will slow down the completion of some new home and home renovation projects.”

The construction industry is an important end market for chemicals.

Paints and coatings are made with titanium dioxide (TiO2) and several solvents such as glycol ethers, butyl acetate (butac), methyl ethyl ketone (MEK) and isopropanol (IPA).

For polymers, most polyvinyl chloride (PVC) goes into construction, according to the American Chemistry Council (ACC). Polyurethanes and expandable polystyrene (EPS) are used in insulation.

Other polymers used in construction include high density polyethylene (HDPE).

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