Asphalt Industry News February 2006

AGC: Construction spending maintains momentum, but high fuel and materials costs pose problems in 2006
"Construction spending in November outpaced even the upwardly revised October and September totals," Ken Simonson, chief economist for the Associated General Contractors of America (AGC) says. He was commenting on new Census Bureau figures that showed the value of construction put in place set a record of $1.15 trillion at a seasonally adjusted annual rate, up 0.2 percent from October. The totals for October and September were revised up by one percent apiece from last month's estimates.

"Growth has been steady and well distributed among the major construction segments for the past several months," Simonson observes. "For the first 11 months of 2005, total construction was nine percent higher than in the same months of 2004. Private residential construction grew 11 percent, public construction, eight percent, and private nonresidential, five percent.

"The leading categories have been multi-retail (general merchandise, shopping centers, and shopping malls), up 25 percent year-to-date; manufacturing construction, 23 percent; private multifamily, 21 percent; hospitals, 13 percent; private single-family, 12 percent; and highways and streets, 11 percent," Simonson notes.

"Fast-rising materials and fuel costs have exaggerated the growth in some of these categories, especially highway construction," Simonson adds.

"For 2006, I expect the cost of fuel, asphalt, and plastics such as polyvinyl chloride (PVC) pipe, to average 10 to 20 percent higher than in 2005, because of high petroleum and natural gas costs," he predicts. "Copper remains expensive, and I expect continuing spot shortages of cement that will push concrete prices higher nationwide. However, steel, wood, and gypsum products should be no higher on average than in 2005 despite a lot of month-to-month volatility.

"The leading construction segments are likely to be manufacturing, health care, and lodging," Simonson says. "Single-family construction will fade as the year goes on.

"I'm worried that states will have a hard time maintaining growth in highway construction," he concludes. "High fuel prices are bringing down fuel consumption, which in turn lowers state and federal highway trust fund receipts."

Wage & benefits survey available
ARTBA offers 2006 data
Are you interested in learning more about what contractors in your area are paying their employees? The American Road & Transportation Builders Association Transportation Development Foundation's (ARTBA-TDF) 2006 "Transportation Contractors Salary & Benefits Survey" can help.

The new ARTBA-TDF publication provides data for 30 office and field positions found in a typical firm in the transportation construction industry. Detailed salary, bonus and benefits information is also included.

The survey results were based on responses from contractors representing firms of all sizes and from across the country. Results are presented nationally and in five regional divisions. Specific information is provided on compensation for small (less than $5 million), medium ($5-$50 million) and large (more than $50 million) firms.

The publication also includes the average, high and low salaries and bonuses for top executives, office personnel and field workers. Hourly wage and benefit information is provided for hourly workers, both skilled and unskilled. Workforce composition such as the number of unionized, Hispanic, African-American and women hourly and salaried employees is also available, broken down by region.

The 150-page survey can be purchased for $200 by contacting ARTBA's Beth Tilahun at (202) 289-4434 or by visiting www.artbasalarysurveys.com.

Forney goes west
Testing equipment company opens second customer service center
Forney Inc., a manufacturer of testing equipment for the construction industry, has opened a second customer service center in Denver, CO. The center will be known as Forney West. The move is part of Forney's ongoing commitment to improving customer service. Customers will see shipping times and costs much reduced. Technical expertise will be available 12 hours a day.