Concrete producers and contractors who were hoping for increased business from a much-ballyhooed infrastructure spending plan from Washington, D.C. are going to have to wait. And wait and wait.
An infrastructure spending package "has become increasingly unlikely," said Ken Simonson, chief economist with The Associated General Contractors of America. "Congress will not be passing something even in 2018. Don't expect more federal money. There's a lot of confusion as to what the administration plans to do, when they will do it, and what will be in it."
Spending $1 trillion on the nation's aging and crumbling infrastructure was promoted by both parties during the 2016 election campaign. But since Donald Trump became president, there has been no progress, as Congress turned its attention to unsuccessfully repealing and replacing the Affordable Care Act. Now, attention has turned to tax reform.
Simonson made his comments at the National Ready Mixed Concrete Association's Concreteworks conference in Grapevine, Texas, on Oct. 3.
Overall, Simonson forecast an uneven growth for various sectors of the economy. Non-residential construction will grow 1-3% this year, followed by 1-5% in 2018. Commercial (retail, warehouses, and farming) is growing 8-12% this year and could be less in 2018.
Retail, contracted by 49% in this year's third quarter, as retailers declare bankruptcy and the sector is dragged down by online shopping. But warehouse construction is picking up much of the slack. thanks to Amazon and its competitors who are building warehouses of 1 million square feet and larger.
Office construction has flattened. Many companies are moving their headquarters, but they are opting for taller buildings, not the spread out office campuses of the past which used lots of concrete for parking and sidewalks.
Private residential construction should increase 7-9% this year, and increase 6-9% next year, he forecasts.
Hiring continues to be difficult, Simonson said. The most difficult construction positions to fill, according a a recent survey, are carpenters (58%), electricians (53%), bricklayers (53%), concrete workers (51%), and plumbers (50%).
To attract experienced workers, 60% of contractors are raising base pay, he said.
Reconstruction in Texas and Florida after hurricanes Harvey and Irma will be a long process, Simonson said. "Most rebuilding will take years to get funding, designs, and regulatory approvals," he said. Those areas will see increased demand for plywood, wallboard, trucks, and laborers.
This article was originally published in The Concrete Producer magazine.