This week the American Road and Transportation Builders Association (ARTBA) is holding is National Convention in Milwaukee. As part of the program, ARTBA held a general session panel discussion on the state of the U.S. transportation construction industry. A panel of six industry experts sat down to answer questions about the current and future state of the transportation construction industry.
- Stu Levenick – Group President of Caterpillar Inc.
- Doug Black – President and COO of Oldcastle, Inc.
- Scott Cassels – President of Kiewit Infrastructure Group and Executive Vice President of Kiewit Corporation
- Paul Yarossi – President of HNTB Holdings Ltd.
- Don James – Chairman and CEO of Vulcan Materials Company
- Ward Nye – President and CEO of Martin Marietta Materials, Inc.
The overall opinion of the current business environment was one of uncertainty, a word that kept popping up throughout the panel discussion. Yarossi described the current environment as ok – not good and not bad. While many see private construction coming back, infrastructure is still a drag, Black said. Panelists agreed that much of what is being discussed now is focused on the short term, which results in uncertainty for the future. The panelists also agreed that the business environment varies quite drastically based on geography.
Levenick added that policy uncertainty is also driving different customer behavior, and that is one of the reasons the industry has seen an increase in the rental market.
When asked to look into their crystal balls and predict what the transportation construction market and business will look like in 2020, many panelists continued with the theme of uncertainty. They were all in agreement that funding needs to be different from what it is today. “It has to be multi-directional,” said Cassels. “It can’t just be the gas tax.” Cassels added that by 2020 the industry needs to find a combination of creating funding and decreasing the cost of doing business. In order to decrease costs, he says the industry will need to focus on innovation and how to build more with less.
Yarossi agreed, adding that contractors and manufacturers will need to help streamline the construction process. He hopes that the industry will be able to find other sources of funding and will have a new strategic plan by 2020. Yarossi also says that the industry will need to focus on building what is most important to the economy.
Black added that the access to instant information and technology may have an impact on how the market and industry will look in 2020. He says those in the industry need to be in tune to what’s evolving, providing the example of driverless cars and how that might improve safety and efficiency.
As active members of the industry, the panelists also shared ways their companies have made changes in their businesses over the last few years of economic downturn. Most talked about how they improved and streamlined processes. Cassels said Kiewit focused on improving technology in everything the company does. James said Vulcan Materials incorporated a new ERP system which helped them save money through back office consolidation. For Caterpillar, the company worked on having triggers in place for possible situations allowing employees to say “here’s what I’m going to do when…” Levenick said. Black added that Oldcastle increased spending on front line employee training for both sales and customer service as well as safety training.
A few other notable comments during the panel discussion included:
- Encouraging DOTs to be forward looking and work with contractors in the industry and innovation and streamlining
- The Affordable Care Act will continue to cause frustration because many employers are still uncertain of its full effect; may give employers a reason to hold back on hiring
- Innovation will continue to change and improve the industry