Contractors Turn: Anecdotes of the 2009 Season

Last week I passed along some numbers from manufacturers and material producers I've been talking with -- this week it's the contractors' turn. Not surprisingly most contractors I talk with report business in decline and tough competition -- both of which lead to tighter margins. That's pretty much what we've been hearing all year. Here are a few comments: * "Our business is down 7%," says one southern sweeping contractor. "The good news is the decline is all cutbacks in service, not cutbacks in price. I can get the service back I can’t get the price back." * "We are actually down about 9%," says an East Coast sweeper, adding that there still has been a nice upside to his business this year. "Our maintenance division has been doing very well. I have had only one red month this year (and I know exactly why it happened) so overall it's steady as she goes. What I have been telling other folks is 'We are working twice as hard to break even.'†* On the other side of the country a western pavement maintenance contractor reports that sales for the first quarter were down over 2008 but that April sales jumped and May sales jumped even more. June sales for this contractor dropped from 2008 but July sales in 2009 skyrocketed. So it's been an interesting year made even more interesting by where the sales came from. This contractor notes that in 2008 sealcoating, cracksealing, and pavement marking lead they way accounting for almost 55% of sales. This year, however, HMA overlays dominate the work, and a recently added service, sweeping (primarily for construction sites) also plays a role, accounting for almost 9% of 2009 sales. "This year the 2-in. overlay, 1 1/2-in. overlay, remove & replace, rotomilling and about 90% of the patching has been subcontracted out. Last year they were subbed as well, however we did 90% of the patching our self and only subbed out around 10%. We have had excellent luck with subcontracting this year, its honestly amazing," the contractor told me. "Our sweeping is a new service that’s only a year old (accounting for less than 3% of 2008 sales). It has helped cover some of the other lower numbers and has been a consistent source of revenue. Almost all the sweeping (90%) is contracted following a large road slurry company around and only 10% or less is doing one weekly account or our own work." Respond to this blog and let me and other Roundabout readers know how your business is doing and what you think the rest of your season likes like. I'm hoping for dry weather and a long, long time before winter sets in.