The construction sector has remained the sickest patient in the recovery room as the U.S. economy has tried to bounce back from the sharp downturn of 2008 and 2009.
To some extent, that health status is reflected in the annual tonnage figures that are reported by producers of recycled aggregates.
A number of crusher operators have reported figures that are lower than those reported for the 2009 or 2007 versions of our list of the 20 Largest Recycled Aggregates Producers.
That trend is not unanimous, however, with some crusher operators continuing to find opportunities. Highway projects have kept some companies busy, such as the Interstate 35 project in Iowa featured in this issue in a story starting on page 26.
Other crushing plant owners have been fortunate enough to be involved with major demolition and redevelopment projects that have proceeded despite economic conditions. (For an example of that, see the March/April 2011 cover story “Clearing the Way,” in which the No. 1 company on the list, Independence Recycling, was involved.)
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QUIET ON THE WESTERN FRONT
Crushing companies located in California and other Western states have shown the greatest likelihood to report a decreased tonnage figure for 2010.
A combination of decreased economic activity and a crowded competitive field has caused California companies such as Lehigh Hanson Aggregates West Region, Dan Copp Crushing Corp. and RAMCO to produce fewer tons in 2010 than they did in 2008.
California’s construction sector has suffered from numerous setbacks, sharing some afflictions with the rest of the nation while also having a few unique conditions of its own.
According to the Associated General Contractors of America (AGC), data from the month of May 2011 (the most recent available) offers little encouragement on the national front. The construction spending figure for May marked the sixth straight month of decline, reaching an 11-year low.
The AGC cited “shrinking public outlays” and a weak residential construction sector as leading factors in the sector’s misery.
“Despite a few bright spots—power, manufacturing and warehousing and distribution facilities—most construction is stuck in neutral at best or is shrinking,” says AGC Chief Economist Ken Simonson. “Five years removed from the peak in spending and jobs, the industry still faces a long road to recovery.”
After analyzing Census Bureau data, Simonson and the AGC comment that “public construction spending has skidded 12 percent in the past eight months as state and local budget cuts have outweighed federal spending on stimulus and military base realignment projects.” The AGC commentary continues, “Meanwhile, the widely reported upturn in private apartment activity has yet to show up in the Census numbers.”
According to the AGC news release summarizing May 2011 construction activity, construction spending had dropped compared with one year ago. “Private nonresidential spending increased 1.2 percent from April to May but fell 5.1 percent compared with the May 2010 level. Private residential spending was off 2.1 percent for the month and 6.6 percent year-over-year. Public spending dropped 0.8 percent and 9.3 percent, respectively,” according to the AGC.
Of interest to crushing plant operators, the AGC news release notes, “The two biggest public categories—highways and educational construction, which make up more than half of the public total—both contracted sharply in May. Highway construction fell 1.5 percent for the month and 11.3 percent year-over-year, while education spending dropped 2.3 percent and 8.7 percent.”
Economist Simonson says of the construction sector, “Declining public spending is likely to keep overall gains modest at best.”
Measured by construction employment, several of California’s largest cities continue to experience a lagging building market.
In an AGC comparison of 337 metropolitan areas, these are among the California metro areas that rank in the nation’s lower third (as measured by the decrease in construction jobs lost from May 2010 to May 2011):
- Los Angeles, ranked No. 231 (4,200 fewer jobs or 4 percent);
- San Francisco, ranked No. 271 (1,800 fewer jobs, or 6 percent);
- Oakland, ranked No. 298 (3,800 fewer jobs, or 8 percent);
- Riverside/San Bernardino, ranked No. 314 (5,300 fewer jobs, or 9 percent); and
- Fresno, ranked No. 319 (1,200 fewer jobs, or 10 percent).
The residential sector in California continues to nurse a “foreclosure hangover,” while a recently passed state budget tightens up spending on a number of fronts, including further delays in the construction of a voter-approved high speed rail system.
Not all of the companies on the 2011 version of the 20 Largest Recycled Aggregates Producers reported less activity than they had two or four years earlier.
Among those reporting increased tonnage figures for the year 2010 were Ohio’s Independence Recycling, Minnesota’s Intex Corp. and Southern Crushed Concrete in Texas.
As we have each time we’ve compiled this list, we encourage responses from companies crushing 250,000 tons or more of concrete, asphalt, brick and block annually and stand the likelihood of being involved in a highway or demolition/construction project.
Identifying the 20 Largest Recycled Aggregates Producers in the U.S. continues to present challenges and can raise as many questions as it answers.