1. Canadian Cement & Construction Outlook
Spring Board Meeting
April 29, 2008
David Czechowski, Sr. Canadian Economist
The U.S. is in the hospital. Canada is sick but still showing up for work

2. Economic & Construction Overview
Economist magazine says 4th best in the world to do business
Issues: Employment/$/Debt/Commodity prices
Inflation off the radar
Q4GDP: slowest in last four years

3. Cement Consumption During Recessions
Million ?
Tonnes 12 10 8
42% drop in recession. Return CA to a 5.6 mmt market? 6 4 69 73 77 81 85 89 93 97 01 05 08
Canadian Recession
U.S. Recession

4. Employment Growth Canada U.S. 3.0 2.5 2.0 1.5 1.0 0.5 0.0 04 05 06 07
Forecast % % % %
Year-Year
Percent Change
3.0
2.5
2.0
Canada
1.5
U.S. Recession
Housing Market Collapse
Foreclosures accelerating
Credit Risk Aversion now Spreading
Labor Markets in Decline
Outlook not favorable
Consumer Confidence Tumbling
Consumer debt loads signaling a retrenchment
Energy Costs
Stealing from growth and stimulus
Fiscal/Monetary Actions
Long to develop
1.0
0.5
U.S.
0.0 04 05 06 07 08

5. Residential Sector Housing Starts Forecast 2008 - 7.5% 2009 - 2.7%
260
Housing Starts
Units (000)
Forecast % % % %
Subprime never an issue
Credit tightening underway
240
220
200
3 Month
Moving Average
180 05 06 07 08

6. Nonresidential Sector
Office vacancy rates down in all top 5 metros

7. Cement Markets

8. Cement Imports
000 Tonnes
1200
+ 48%
900
Clinker
600
Cement
300 99 00 01 02 03 04 05 06 07 08

9. Canadian Share of U.S. Imports
2004
2005
2006
2007
Asia
29.5%
36.0%
53.9%
50.3%
Canada
21.1%
16.1%
14.1%
23.4%
Europe
19.7%
18.5%
13.0%
8.4%
Latin America
20.9%
17.4%
11.4%
12.4%
Mexico
5.3%
6.5%
6.3%
7.7%
Other
3.6%
5.5%
1.3%
0.5%

10. Cement Exports
Forecast % % % %
Million
Tonnes
$/Mt
8.0 90
Clinker
Cement
Customs Value (FOB) 85
6.0
+ 10% 80
4.0
Freight rates dragging on U.S. import flows as well as lack of demand 75
2.0 70 65 90 92 94 96 98 00 02 04 06 07

11. Cement Capacity Utilization
New Capacity: Lafarge, Exshaw, AB
+900,000 On Stream: 2010
Percent 95
U.S. 90 85 80 75 96 97 98 99 00 01 02 03 04 05 06
Source: PCA Labor/Energy Input Survey

12. SCM Consumption
MMT
+ 10.3%
Million
Tonnes
1.5
1.4
1.3
1. 0
Jan +19% Feb +28%
1.1
1.0
0.9 00 01 02 03 04 05 06 07

13. Portland Cement Consumption
Forecast % % % %
Million
Tonnes
11.0
10.0
+ 3%
9.0
8.0
7.0 99 00 01 02 03 04 05 06 07 08 09 10 11

14. Portland Cement Consumption
Index
2000=1.0
2.0
British Columbia
1.8 9%
1.6
Prairies
1.4 4%
Atlantics
Performance Indicators Will Slow
Employment Growth Advances at a Slower Pace
Stubborn C$ funding consumer spending but will drag on trade
Debt levels may slow consumer
Residential Construction Markets Weak this Year and Next
Fatigue in both Singles and Multiples
Nonresidential Construction Maintains Rise
Supportive but at a slower pace
Engineering Construction Opportunity in Place
Requirements plentiful with adequate funding available
1.2 4%
Quebec 4%
Ontario
1.0
- 1%
0.8 00 01 02 03 04 05 06 07 08 09 10 11

15. Risks Prolonged or Deeper U.S. Recession
Ultimately Canada could not escape
Canadian Consumer Retrenches
Debt levels become unmanageable
Commodity Price Collapse
Global financial and economic meltdown pressures commodity prices and drags on growth
Nearly 5 years of +8% consumer debt outstanding
Mortgage debt +92% since 2000