Construction Equipment Owner

According to a survey of utility contractors released by the Associated Equipment Distributors (AED) and the National Utility Contractors Association (NUCA) the recent Economic Stimulus Act has had a positive impact on the construction industry. The main benefit came in various incentives to purchase equipment.

The report also feels that the economy and construction industry could be immediately strengthened by increasing the investment in water infrastructure and extending the ESA’s capital investment incentives which “would have a positive impact on equipment purchasing next year and demonstrates the direct impact that water infrastructure spending has on the equipment industry.”

According the AED-NUCA report:

• The ESA’s capital investment incentives have had a positive impact on utility contractor equipment purchasing, and will continue to have a positive impact on construction equipment purchasing through the end of 2008.
• Extending the depreciation bonus and increased Section 179 expensing levels through the end of 2009 would provide additional economic stimulus next year.
• Enacting legislation to increase federal investment in water infrastructure would have an immediate and positive impact on the economy and enhance the ESA’s effectiveness.
• Water utility work is equipment-intensive and a significant portion of the average water project bid is attributable to equipment costs.

Probably the most pressing issues facing the heavy/highway construction industry have to deal with the need for increased funding for America’s infrastructure. If finances are not made available many upcoming projects will be delayed or even canceled all-together. Despite having a diverse impact on our road builders, this could have a crippling effect on our nation’s economic health. In the latest edition of this podcast series, Brian Moore discusses the shifting trends of the industry and how it will reshape the industry.

 State of the Infrastructure [15:31m]: Play Now | Play in Popup | Download (114)

Learning about the paving and pavement maintenance business can be a daunting task for someone completely unfamiliar with it — I know because I’ve been there. But over the years manufacturers and contractors have been generous with their time and have shown me the ropes and answered my questions. There’s no question I know more than I did, and I keep learning every day.

But this isn’t about me; this is about Kim Johnston, Pavement’s recently promoted Associate Editor.

See, like me Kim didn’t know much if anything about the paving and pavement maintenance industry when she joined Pavement a little more than a year ago. But boy is she learning. In addition to her constant phone contact with industry pros she’s spent hours visiting jobsites, learning how crews work, how jobs get done, and learning how the equipment does what it does. And just recently she got put to work.

At a Cimline open house to introduce its Metro Series melter applicator Kim jumped at the chance to put the unit through it’s paces (not that you’d want her cracksealing your parking lot just yet), and on a recent contractor visit she got an “operator’s eye view” of what goes on at the screed end of the machine when Bel Rock Asphalt Paving’s crew invited her to get a closer look. Now she’s amazing family and friends as she identifies equipment and its purpose as they drive to the recent Racine County Fair (”that’s a milling machine taking off the top 2 inches before they overlay it”); as she recognizes processes, explaining the difference between sealcoating and slurry seal; and as she points out parking lots that need sealcoating, striping, or even repair. She has become the life of her friends’ parties!

Fun stuff, for sure, but it shows how much she’s learned in a relatively brief time and all that knowledge gets put to use when she writes for Pavement. So if you happen to see her on a jobsite somewhere you can rest assured she’s just getting background for an upcoming article or just learning about the business in general. She’s not getting ready to start her own business…just yet anyway.

Fuel. And fuel costs. And the impact of fuel costs on running your fleet. And the impact of fuel costs on your profit margin and on your bottom line. That’s what’s tops on the minds of most of the contractors we’ve talked with on our annual “reader call” visits so far this summer.

Not really a surprise given the nasty spike in oil costs and fuel pricing, but it is the first time in years that “employees” or some aspect of employee management (hiring, firing, training, retaining) wasn’t the Number One Concern of Pavement readers.

And “employees” even dropped a spot or two on a list of critical issues we discuss with contractors, replaced by declining margins and increased competition, which many contractors view as two sides of the same coin.

The work is out there, contractors tell us, especially striping and pavement maintenance work. But the rise in fuel prices and the rise in prices of materials has meant smaller margins, which means more contractors are bidding for more work to try to maintain sales volume. In fact, most contractors we’ve talked with say the number of bids they’re competing against on the average job has just about doubled over the last year, and that often leads to some closer-to-the-bone bidding, which then impacts margin and bottom line.

Sound like your business this year? Let us know one way or the other.

The latest edition of the Construction Equipment Owner’s Podcast takes a look at the construction industry forecast for the remainder of 2008 and into 2009. Heather Jones, construction economist for FMI’s Research Services, shares the findings of FMI’s Second Quarter 2008 Construction Outlook that points to construction for 2008 remaining much the same with the outlook for 2009 being revised down slightly because. Listen as Heather shares the indicators behind the forecast and provides some additional insights in to the non-residential segment.

If you would like to receive the quarterly Construction Outlook, e-mail Heather at hjones@fminet.com.

 Construction Outlook Second Quarter 2008 [5:06m]: Play Now | Play in Popup | Download (161)

Fred Jacoby, Vice Chairman of Cozen O’Connor, shares his experiences on the recent shift in legal issues he views to be having a significant affect on contractors.

To follow up on these or other construction-related law items, you can e-mail Fred at fjacoby@cozen.com

 The Shift in Legal Issues Affecting Construction Contractors [8:30m]: Play Now | Play in Popup | Download (184)

“Green building” is a popular buzz phrase these days, but does anyone really know what it means? I think of it as a broad term, encompassing many different definitions depending on the context in which it’s used. Generally it refers to a building process that lessens the impact construction can have on the environment. For instance, it may mean designing a building to maximize daylighting to reduce electricity needs; or it may mean choosing sustainable flooring materials such as bamboo or cork in place of hardwoods; or it may simply mean recycling construction materials to minimize the amount of waste that ends up in a landfill at the end of a project.

Much of green building focuses on reducing energy use or choosing recycled or sustainable materials. Another definition of “green building” can refer to it’s affect on the people who live and work in those buildings or attend school in them. The PCA’s most recent Concrete Homes Newsletter highlights the KC Health Home – a house built with indoor air quality in mind. The builders used an efficient HVAC system and chose products with low toxicity levels to help keep air pollutants in the home at a minimum. As consumers become more and more educated about the buildings they work and live in, builders will need to meet their requests with structures that incorporate energy efficiency, indoor air quality and use of recycled materials more and more. As a business owner, it’s in your best interest to stay informed of these trends and technologies and know how you can implement these requests on future projects.