Advantage: Pavement Maintenance

While the U.S. Open tennis tournament slams and slices its way to this weekend’s championship games (is anyone out there not picking Justine Henin and Roger Federer to win the singles’ championships?) tennis watchers are faced with “deuce†points, when opponents are tied, and “advantage†points when one player is one point a way from winning a game. Deuce is okay – you haven’t lost yet – but “advantage†is where you want to be, in control and on the verge of a win. In the current economy – in fact in most economic situations -- there’s no question it’s advantage: pavement maintenance, and here’s why. Recent Commerce Department construction figures reported by Associated Builders and Contractors (ABC) announced that “Over the past year, total construction spending fell 2% dragged down by the continuing decline in the housing market. Despite the 13.9% increase in nonresidential construction, the 15.6% decline in residential construction resulted in a largely unchanged level in overall construction spending over the past several months.†So even though overall construction has declined, nonresidential construction has increased almost 14%. In fact, the only nonresidential segments that did not experience an increase in the last year were the highway and street segments. This certainly isn’t the best news for paving contractors who rely on residential, street, or highway construction for their paving work, but pavers who rely on other nonresidential work to drive their business have seen an increase in construction; that work is out there, and that’s what we’ve been hearing from contractors all year. But for the rest of the pavement maintenance contractors – those who sealcoat, stripe, patch, repair, and even sweep – what do those construction figures mean? Not a whole lot. Why? Because pavement maintenance has little to do with new construction, whether it’s residential or nonresidential. Maintenance is done on existing pavement to make it last longer, look better, and stay cleaner, and no matter how you slice it contractors who offer pavement maintenance services – especially a mix of pavement maintenance services – are in control, having positioned themselves to survive and even thrive no matter what the economic situation is. So it’s advantage: Pavement maintenance. Maybe Henin and Federer can make the same claims this weekend, but I’m crossing my fingers for Carlos Moya…he’s “the old guy†at 31. If you want to read the complete one-page ABC report and analysis, including the segment-by-segment breakdown, visit www.ABC.org and click on the Construction Economic Update.

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