As many hit the gym and balance their diets for a last chance at a summer body, the concrete industry also has slimmed down. But this weight loss came without choice, thanks to the nation's worst economy since the Great Depression of the 1930s.
Not surprisingly, the TCP100, The Concrete Producer's annual survey of revenue, showed 2009 was another disappointing year. Many producers have tightened their belts and are left wondering what kind of future awaits them. Some saw a remarkable 50% plunge in revenue from 2008 to 2009, while a few actually held steady. Revenue for the public companies on our list fell 21%. The bottom may have been reached this spring when Houston-based U.S. Concrete, No. 18 on our list, filed for bankruptcy.
David Bloxom, owner of Speed Fab-Crete Corp., a precast producer in Fort Worth, Texas, may have summed it up best: “Profitability is down, competition is fierce, and job payments are slow.”
When President Barack Obama signed the $787 billion American Recovery and Reinvestment Act in February 2009, the construction industry hoped it would rain down instant relief. One and a half years later, producers are still feeling the recessionary crunch and wondering where all of that money went.
“The stimulus programs by the U.S. administration failed to provide a boost to the construction sector to the extent hoped for,” Holcim stated in its annual report. “In light of substantial government deficits, political decision- makers and authorities concentrated less on enacting infrastructure projects and more on honoring social services.” But even with the U.S. economy growing at a meager 2.4% annual rate in this year's second quarter, calls for more stimulus spending will probably not be heeded as worries about deficit spending grow.
The Portland Cement Association claims that nearly $60 billion of the stimulus plan is targeted directly at infrastructure investment, although the exact amount is still highly debated. Many observers also estimate that only about one-half of the stimulus funds have been distributed, meaning more business should be in the pipeline.