1. Cement Outlook Ed Sullivan, Chief Economist PCA PCA’s Fall Board Meeting November 2011 Named Most Accurate Forecaster By Chicago Federal Reserve, 2009

2. Portland Cement Consumption Thousand Metric Tons Summer Forecast

3. Economic Outlook

4. Synchronized Recovery Theory Incremental Demand Gains Job Gains Sentiment Gains Lending Standards Ease & Hiring Accelerates Heals Structural Restraints In the context of moderating productivity Gains Leads to: Sentiment includes Consumer, Business & Banks: Defaults & perceived lending risks decline Job creation determines how quickly the recovery cycle spins.

5. False Hopes: Net Job Creation Annualized Net Job Creation 2.7 Million Annualized 3 month Moving Average

6. Real GDP Outlook Annualized Growth

7. Employment Outlook Annual Change, Thousands Employed Source: BLS Recession Recoveries: 3 Years Following, Annual Average 1991: 3.08 Million, 2001: 2.22 Million, Current: 1.35 Million

8. Housing Recovery

9. The Residential Recovery Process Mortgage Resets Working Through Structural Repair of Housing Market Will Take Time Before Impacting Housing Starts. Foreclosures Bank Possessions Shadow Inventories Heightened Inventories Inventory Burn Off Price Stability Starts Recovery

10. Single Family Sales Outlook Thousands of Units

11. Single Family Months Supply Thousands of Units

12. Single Family Home Price Outlook Y-O-Y Percent Change

13. Single Family Upside Risk? Single Family Starts Projections Comparison Thousand Starts 201120122013 PCA421443567 Mortgage Bankers Association420474619 NAHB424495723 National Association of Realtors416480---- Other Associations’ Average420483671 Tons Per Start19.2 Upside Risk (000 Tons)---7681,997

14. Portland Cement Consumption Thousand Metric Tons Summer Forecast

15. Nonresidential Drag

16. Nonresidential Construction Real 1996 PIP $ -50% Source: Dept of Commerce, PCA

17. Nonresidential Conclusions No longer a significant drag on construction activity. Large imbalances exist in before a positive NOI materializes  Slow job growth implies slow healing process Credit environment hostile. Conditions for positive ROI years off. Not a significant contributor to cement consumption growth near term.

18. Office Buildings: Recovery Process New Office Hiring Vacancy Rates Decline Leasing Rates Stabilize Credit Troubles Ease Asset Prices Firm 1/5 of all jobs in the office. After reaching threshold of roughly 14% vacancy rate Defaults & perceived lending risks decline Leads to a recovery in office construction.

19. Office Employment Thousands Employed Vacancy Rate: 12.7% Vacancy Rate: 18.3% Vacancy Rate: 11.3% Source: BLS

20. Office Building Valuation Property Value Index, 2000=100 Source: Moody’s -36%

21. REIT Office Dow Jones REIT Index, Total Return, 1990=100 Source: Dow Jones REIT Index Recaptured 70%

22. Public Recovery

23. State Deficits $ Real National Estimates: States Do Not Heal in a Synchronized Fashion

24. ARRA Sterilization: State Spending Change in Spending, Real Million 1996$ ARRA $ State $ 76% Sterilization 43% Sterilization

25. ARRA Sterilization: State Spending Change in Spending, Real Million 1996$ ARRA $ State $ Increase In State Spending Reduces Adverse Impact ARRA $ State $

26. Discretionary State Highway Cement Consumption Thousand Metric Tons

27. Highway Bill Cement Consumption Projections Spring Versus Summer Assumptions Spring Forecast Summer Forecast

28. Obama Initiatives: Impact Infrastructure spending = ARRA Infrastructure Bank No/limited direct impact 2011-2012. Modest impact 2013-2014 Proposals do not change near term outlook

29. Beyond the Crisis

30. Initial Bid Concrete Vs Asphalt Paving Costs Dollars Per Two Lane Road Mile - Urban Source: PCA estimates using Wispave (Wisconsin DOT paving cost software) Concrete Asphalt

31. Initial Bid Concrete Vs Asphalt Paving Costs Dollars Per Two Lane Road Mile - Urban Source: PCA estimates using Wispave (Wisconsin DOT paving cost software) Concrete Asphalt Oman Data US Average: 15.3%

32. Initial Bid Concrete Vs Asphalt Paving Costs Dollars Per Two Lane Road Mile - Urban Source: PCA estimates using Wispave (Wisconsin DOT paving cost software) Concrete Asphalt Oman Data US Average: 15.3% 15% Advantage 18% Disadvantage 42% Advantage

33. New Paving Realities: Impact Cost Advantages will Increase “Free Market, Lowest Cost Material” Doesn’t Always Win. Escalators, LCCA Discount Rates, ADAB, MEPDG State/Local Advocacy Focus Upside Forecast Risks?

34. Cement Outlook Ed Sullivan, Chief Economist PCA PCA’s Fall Board Meeting November 2011 Named Most Accurate Forecaster By Chicago Federal Reserve, 2009