The TCP Survey shows that North American precast concrete producers are continuing to grow their business. Here’s how:
- In the past 12 to 24 months, precast producers have invested in new equipment (55%), expanded customer bases (45%), and added products lines (31%).
- Seventy-six percent plan to buy new equipment in the coming year, with 69% saying they will have more to spend on capital expenditures than they did in 2015.
- At least nine out of every 10 producers plan to hire in 2016.
The National Precast Concrete Association (NPCA) confirms that the precast concrete industry grew 14% in 2015, relying on a mix of traditional infrastructure components and emerging products. That’s the conclusion of the NPCA 2016 “Precast Industry Benchmarking Report,” based on data collected this spring from 2,800 precast producers.
With total sales for 2015 estimated at $23.1 billion in precast products, the industry recovered 84% of its peak revenue, when sales were $27.5 billion in 2007.
That is a strong recovery, says Ty Gable, NPCA president, adding that it points to a strong overall construction market coupled with state and local initiatives to rebuild infrastructure where the federal government remained gridlocked. Gable is confident that the industry will continue its recovery, which started in 2012, into a fifth year in 2016, with 2017 looking fairly strong as well.
All of the product groups NPCA tracks recorded higher sales in 2015. The largest product line in the industry, utility vaults, again led the way with an estimated $3.25 billion in sales, representing 12.6% of all industry revenue from sales of precast, prestressed, and pipe products.
Two other product lines also grew substantially. The precast concrete pavement slabs (PCPS) category more than doubled in size, from $37 million to $79 million in sales, and the sound wall/sound barrier segment grew from $484 million to $908 million, an 87% increase.
“Several DOTs are using precast concrete pavement slabs for rapid highway repair and others are experimenting with PCPS, so this is an area for future growth,” Gable says. “The sound wall sector is also growing steadily as expressways are being expanded or refurbished. Sound pollution is an important issue in many cities and many of today’s precast sound walls are designed with intricate design details that look good while they mitigate traffic noise.”
FAST Act impacts
“Infrastructure rebuilding has taken on a more local flavor in recent years as the highway bill and water bills have been stalled in Congress,” Gable says. “State and local governments are finding various ways to finance projects, and if it involves infrastructure, it usually includes precast.”
Passage of the federal $305 billion highway bill last December should provide transportation departments with a more stable financing environment. “We would expect new projects to come online in 2017 as a result of the highway bill. While we may not approach the 14% growth we experienced last year, we are still fairly confident that 2016 and 2017 will be growth years,” Gable says.
On par with Gable’s forecast, 55% of precast producers who participated in the 2016 TCP Survey expect sales to increase this year.