Does 2019 Keep you Up at Night?

The industry will face five main struggles in 2019, but the outlook remains positive

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The asphalt industry is anything but predictable. From the challenges of day to day operations to yearly financial certainty, it’s hard to know what to expect. Each year, we reach out to asphalt industry experts to get their input on where we stand and where we’re going. Our hope is that their insight helps to answer those burning questions that keep you up at night.

Complete insight for this year’s State of the Industry can be found on page 16 of this issue, but here’s an overview of what we’re going to be facing heading in to 2019:

1.      Funding

The value of highway, street and related construction work is expected to grow nearly 5 percent in 2019 and experts predict highway construction market activity to increase in about half of the states and Washington, DC in 2019.

In 2018, the FY2018 Omnibus granted $20 Billion to “infrastructure.” Highways received an additional $4 billion in FY 2018 and a similar amount is expected in FY 2019 which is giving contractors some certainty. And while there is no federal infrastructure funding package, there were nearly 540 state and local ballot initiatives during the 2018 primary races and general election. Voters approved 81 percent of those measures, showing their continued support to raise revenues for increasing transportation investment.

2.       Labor

78% of construction firms report that they are having a difficult time finding qualified workers. That’s causing a huge problem for those companies who do have a long list of work in the pipeline. The industry is going to have to make some serious changes in order to attract workers to these careers.

Industry experts suggest education, apprenticeship programs, increasing wages and expanding the workforce to combat these challenges

3.       Material Prices

According to the most recent data released by the U.S. Bureau of Labor Statistics, construction material prices were up 7.9 percent in October 2018 compared to the same time a year earlier. This could cause a challenge for 2019.

Prices for prepared asphalt have also been on the rise. Between October 2017 and October 2018, the price of prepared asphalt rose by more than 10 percent in America. 

The continued use of tariffs will also have a negative impact on road building projects.

4.       Safety

In the last year alone, 54% of contractors reported that a vehicle had crashed into their work zone. The industry needs to make changes in order to keep workers away from distracted driving.

Experts say construction companies need to create a safety culture within their organizations and put safety above all things including productions and profits. The traveling public also needs more education on the consequence of distracted driving. We as an industry need to continue to lobby to get speed limits reduced in work zones with increased penalties for violations.   

5.       Technology

A recent survey of engineering and construction executives found that 72% of respondents say technological innovation played a role in their company vision but less than half had a clear strategy in place to integrate those advancements. In addition to a lack of vision, only 5% of respondents considered themselves on the forefront of embracing these advancements with the majority of people indicating they were industry followers instead of leaders. This needs to change if the industry is going to thrive.

What are you anxious or excited about in 2019? Let me know at [email protected]

 

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