House Starts Not Expected to Rebound Until 2010

High inventories, weak economic conditions delay start activity

SKOKIE, Ill., July 2 /PRNewswire-USNewswire/ -- Housing starts in 2008
are expected to be 36 percent lower than 2007 levels, creating three
straight years of declines. According to a recent Portland Cement
Association (PCA) Economic Research report, the toxic mix of weak economic
conditions, tight credit conditions, and tepid sales are causing huge
housing inventory overhangs that must be cleaned up before housing
construction can begin its recovery.

"Despite large home price declines and improved affordability, sales
remain sluggish and offer little hope that the inventory glut will be
worked off anytime soon," says PCA Chief Economist Ed Sullivan. "The
economic environment remains weak, being dragged down by high energy costs
and weak employment fundamentals."

Sullivan says current home inventories stand at a 10.5-month supply,
more than double the 5-month supply that normally accelerates start
activity. Continual cutbacks in starts and marginal gains in sales are
expected to be more than offset by increases in housing foreclosures that
will be added to the market's inventory in 2008 and 2009.

PCA projects an additional one percent start decline in 2009, with
recovery to take place in 2010.

Even then, the onset of recovery will vary among regions and states.
States that fully participated in the housing boom, like California,
Arizona, Nevada, and Florida, will have a disproportionally high number of
defaults and foreclosures and even more delayed housing start recoveries.

About PCA

Based in Skokie, Ill., the Portland Cement Association represents
cement companies in the United States and Canada. It conducts market
development, engineering, research, education, and public affairs programs.
More information on PCA programs is available at http://www.cement.org.

A video of Ed Sullivan delivering highlights of his forecast is
available at http://www.cement.org.

Note to editors: To obtain a copy of PCA's Residential Flash report,
contact Patti Flesher at newsroom@cement.org.