Municipalities Slow to Break Out of “Patch & Repair Mode”

Preservation work has been fueling the cement industry in recent years, but pent-up demand is expected to burst in 2014

Despite evidence that the construction sector is growing, industry expo events like World of Concrete 2014 are seeing a decline in attendance and floor space. In part this may because equipment makers are choosing their opportunities to showcase their wares more carefully—whereas in the past most equipment makers would have attended both World of Concrete and CONEXPO/CON-AGG even though the two shows are only a few weeks apart, in today’s economy many companies are choosing to only attend the bigger expo.

However, another important factor that could be behind the low numbers at World of Concrete 2014 is consumer behavior. According to American Concrete Paving Association spokesman Bill Davenport, many municipalities are still in “patch & repair mode.” This is seen in the private arena as well, as a constrained spending environment has owners of properties focus more on preserving what they already have than on major renovations or new construction.

“Patch & Repair Mode” Can’t Last Forever

The good news for construction companies is that “patch & repair mode” can’t last forever. Eventually all the pent-up demand for new cement and other new construction activities will be released, spurring year-over-year growth for the foreseeable future. According to Edward Sullivan, the chief economist for the Portland Cement Association, this process has already begun. The PCA predicts that cement work will increase by 8 percent in 2014, with US cement makers operating at utilization rates of over 90 percent. PCA’s president said he has heard of member companies who are bringing trucks out of storage to keep up with demand and having trouble finding qualified personnel to drive them.

Desire to Do More with Less Expected to Continue Despite Growth

Even as the future brightens, the effects of recession will continue to make themselves felt. Many municipalities have gotten used to operating on tightened budgets, and may wish to continue with certain money-saving practices. Some municipalities may have even begun doing their own cement patching and repair work using supplies purchased from companies like Grove Construction Hardware, cutting out the middle man entirely. When it comes to big projects, municipalities will continue to use big contractors, but they may be more resistant to inflated bids. Many of the exhibitors at World of Concrete 2014 showed off tools and technologies targeted towards controlling costs by offering improved durability, less power usage, and less downtime. Adjusting to this new environment by adopting cost-saving construction tools & accessories and providing high-quality work on a budget will be crucial for any construction company’s success.