Pavers, Sealcoaters...and the Cubs

Baseball's All-Star Break traditionally marks the unofficial (and mathematically inaccurate) half-way point of the season and it's a time when teams reassess how their first half went, what their second half looks like, and what their prospects are for making the post-season. If you're a Chicago baseball fan it's been a frustrating few months with both the White Sox and the Cubs hovering around the .500 mark and demonstrating that they're not quite "there" yet, though they're not quite out of it either. There are worse places to be at this point. I suspect most contractors feel just like Cubs and Sox fans: There are worse places they could be halfway through the season. Paving contractors, unfortunately, probably feel a little like Baltimore Orioles fans who are watching their team not quite be able to get near that .500 benchmark. At least that's what we're hearing from contractors in the front lines and the manufacturers and material suppliers who support them. Pavement maintenance work continues to be steady if not plentiful, with many contractors scheduled four to six weeks out (in a normal year they'd be six to eight weeks out). Competition is tough, which is having an impact on margins, but the pavement maintenance work does seem to be out there still. And, contractors tell us that, for whatever reason, they have an unusually large number of jobs they've bid -- but those jobs that haven't yet been awarded. So there's an undercurrent of optimism that there will be more work to come, with the prospect of a busy pavement maintenance fall season. With paving contractors, on the other hand, there is no such undercurrent. New construction is still struggling so builders don't need new driveways and new parking lots. Commercial overlay work has also declined as many properties are paying close attention to their pennies as vacancy rates increase while debt loads remain the same. And the federal stimulus package, while generating sporadic work throughout the country, has so far not had the intended impact of putting fleets of iron and crews of workers back in the field en mass. Plus, the work that is getting done is getting done at significantly smaller margins than paving contractors want and need. So if your business is a "Cubs" or "Sox" business and you're doing okay though not as well as you'd hoped, remember we're only halfway through the season; a successful year is still within reach and flirting with .500 is something to build on. If your business is operating like the Orioles (or the Pittsburgh Pirates or the San Diego Padres) a "strong" season might be out of the question but a strong finish to lay the groundwork for 2010 isn't. Do I sound like a Cubs fan or what?

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