Concrete Products

JUL 2012

Concrete Products covers the issues that attract producers of ready mixed and manufactured concrete focusing on equipment and material technology, market development and management topics.

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GOVERNMENT AFFAIRS CP STAFF CONGRESS, OBAMA MAKE TWO-YEAR, $105 BILLION HIGHWAY FUNDING COMMITMENT Although it represents no real gain in dol- lars made available via years of short-term extensions, HR 4348 (dubbed Moving Ahead for Progress in the 21st Century Act, or MAP-21) was signed into law by Presi- dent Obama two days after the July 4 hol- iday. A two-year (FY2013-14, for a total of 27 months), $105 billion extension of the federal highway bill, MAP-21's ceremonial signing occurred at the White House with construction workers on hand to represent putting Americans to work repairing the nation's crumbling roads and bridges. The House of Representatives and the U.S. Senate and approved the legislation a week prior to its signing, with bipartisan votes of 373-52 and 74-19, respectively, ending nearly three years of temporary, often 11th- hour, funding for surface transportation. By comparison, the previous bill known as SAFETEA-LU lasted four years and funded $244 billion in projects. SAFETEA-LU expired in September 2009, leading to a continuing series of nine short-term extensions. MAP-21 includes a directive for the Trans- portation Secretary to issue regulations re- quiring electronic logging devices—also known as electronic on-board recorders (EOBR)—for recording hours of service in commercial motor vehicles. The National Ready Mixed Concrete Association (NRMCA) was among trucking industry-aligned groups strongly opposing the EOBR man- date, and will continue work with other stakeholders to secure an exemption for short haul conditions. There was also a measure regarding the use of coal ash and its categorization by the U.S. Environmen- tal Protection Agency, but it was dropped from the final bill (note Editorial, page 4). The concrete industry approached Capitol Hill calling for Congress to act quickly on pas- sage of a new surface transportation bill by the June 30 deadline of the latest budget ex- tension. NRMCA joined with other transporta- tion stakeholders and members of the Senate to urge Congress to gain consensus on trans- portation issues, pass a new fully-funded, multiyear bill, and put thousands of Ameri- cans back to work by month's end. Providing the backdrop for the rally were four concrete mixer trucks courtesy of association producer member Titan America. NRMCA Vice Chairman Bill Childs, president & CEO of Chaney Enterprises, Waldorf, Md., reminded Congress that, among other things: • Since 2005, ready mixed concrete pro- duction (cubic yards) has declined by 57 percent; • Since the economic meltdown started in 2008, the industry has seen a 40 percent employment reduction; • Every $5 billion of federal investment leads to at least 1 million cubic yards of placed concrete; and, • Every $1 billion of federal investment di- rectly or indirectly supports up to 47,500 construction industry jobs. CONSTRUCTION ECONOMISTS DIFFER ON 2013 MARKET OUTLOOK American Institute of Architects Chief Economist Kermit Baker, National Associa- tion of Home Builders Chief Economist David Crowe and Associated Builders and Contractors Chief Economist Anirban Basu shared their thoughts on next year's busi- ness outlook during a late-June webcast. "[The] construction sector unfortu- nately is the last major sector in the economy yet to recover from this down- turn we've been through," said Baker. "We've seen some progress on the residen- tial side and really none yet in non-resi- dential construction activity." He went on to note that the AIA Consensus Construc- tion Forecast anticipates a very modest growth this year—about 2 percent overall in non-residential construction—with a stronger recovery moving into 2013. Crowe and Basu were not as optimistic. PHOTO: Concrete Products "We're going to have [it] relatively slow by standards of a typical recovery growth over the rest of this year and into next year," stated Crowe, who mentioned that when compared to levels in the early 2000s, which some might call a more normal level, the remodeling market is back up to where it was, the multi-family market is well on its way—about two-thirds, but the single family market is barely one-third of the way back to those levels. Basu's view is bleaker: "I'm not buying in to the proposition that the nation's con- struction industry will recover in 2013. What we have right now is an utter lack of confidence in the economy, and confidence represents a centrally important require- ment for construction spending growth." "We have capital and profitability in the NAHB figures show multi-family housing is among segments on the rebound. 8 | JULY 2012 broader economy, and there is money sitting in the banks," he added. "But many decision makers have adopted a wait-and-see atti- tude until the sea of uncertainty that faces us recedes. This uncertainty includes confu- sion regarding the future path of federal spending, tax rates, the financial chaos in Europe and our own 2012 elections. How- ever, it's not all bad news. Certain construc- tion segments likely will experience growth in the coming months, including healthcare and power generation." WWW.CONCRETEPRODUCTS.COM

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