Managing and Marketing YOUR Industry

by Greg Sitek

The economy is slowly recovering, in some areas more than in others. U.S. auto production is expected to top 16 million vehicles this year. Construction is a mixed bag for both residential and nonresidential, depending on geography. Currently Texas is the king of the hill. Highway construction, which includes streets, roads and bridges, continues to struggle because of the elusive Highway Bill. Although another stopgap measure was passed, it only succeeds in stalling the creation and implementation of a new long-term bill until May, 2015. It did not figure prominently in the media during this year’s elections.

The record-breaking bad 2013–14 winter in much of the country exacerbated the already-desperate need for serious road maintenance, repairs, rehabilitation, reconstruction and replacement, when we couldn’t afford these needs before.

According to ARTBA, the Federal Highway Administration tracks the state of repair on 892,163 miles of major highways that are eligible for federal aid. In 2012, the latest data available, the FHWA found that 182,872 miles of highways, or 20.5 percent, were in poor or mediocre condition and needed repaving or even more substantive repairs.

Highways in rural areas are in somewhat better condition than those in urban areas, with 15.1 percent of rural miles in poor or mediocre condition, versus 32.1 percent of urban miles needing repairs. Urban highways carry more traffic and thus get more wear and tear. The nation’s interstate highways are in relatively good condition, with only 1.8 percent of rural miles and 5.0 percent of urban miles in poor or mediocre repair. Other highways, however, are in much worse shape, particularly in urban areas where more than one-third of all arterial and collector miles are in poor or mediocre condition.

There is no information on the condition of the 3.2 million miles of local roads and rural minor connectors that are not eligible for federal aid. But if the same 20.5 percent are in poor or mediocre condition, then 656,039 miles of these roads would also be in need of repair. (Source: 2012 Highway Statistics, Tables HM-63 and HM-64)

The Federal Highway Administration‘s 2013 national bridge inventory shows that 146,598, or 24.2 percent, of the nation’s 605,471 bridges (excluding Puerto Rico) are either structurally deficient or functionally obsolete. This includes 63,207 structurally deficient bridges (10.4 percent), which are safe to use but need significant maintenance or repair to remain in service, and 83,391 functionally obsolete bridges (13.8 percent) which may be in good repair but fail to meet current design standards, such as lane width, shoulder width or overhead clearance and thus need to be upgraded when they are replaced. (Source: National Bridge Inventory, 2013)

In recent years, state and local highway agencies have been investing heavily in bridge maintenance and repairs. As a result, bridge conditions have been improving. Between 1998 and 2012, the number of deficient bridges dropped from 29.5 percent to 24.2 percent. The improvement was concentrated in structurally deficient bridges, which declined from 16.0 percent of all bridges to 10.4 percent. The number of functionally obsolete bridges actually increased, from 13.6 percent to 13.8 percent.

Following the recent passage of the extension for the highway bill, the Highway Materials Group (HMG) called on Congress to pass a multi-year transportation authorization bill following approval of a temporary measure extending highway funding to May 2015. The coalition represents the raw material suppliers for roads, highways and bridges.

“We are grateful that Congress averted a fiscal cliff by continuing transportation funding through May 2015, but it missed the opportunity to provide the certainty that states, localities and industries like ours, require for road, highway and bridge projects,” said Mike Johnson, president and CEO of the National Stone, Sand and Gravel Association.

Since passage of MAP-21, the HMG, comprised of the American Concrete Pavement Association, the Concrete Reinforcing Steel Institute, the National Asphalt Pavement Association, the National Ready Mixed Concrete Association, the National Stone, Sand & Gravel Association, and the Portland Cement Association, has worked for a new six-year surface transportation authorization to stabilize and grow the Highway Trust Fund.

Add this to the fact that nonresidential construction is on a growth curve, according to Wells Fargo Economics Group and Associated Builders and Contractors (ABC), and that residential construction is also increasing. Single-family housing starts in

July were at a rate of 656,000; this is 8.3 percent above the revised June figure of 606,000. The July rate for units in buildings with five units or more was 423,000. Year-on-year, housing starts rose 7.5 percent from the July 2013 level of 977,000.

Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,052,000. This is 8.1 percent above the revised June rate of 973,000 and 7.7 percent above the July 2013 estimate of 977,000.

Single-family authorizations in July were at a rate of 640,000; this is 0.9 percent above the revised June figure of 634,000. Authorizations of buildings with five units or more were at a rate of 382,000 in July.

Why this is important to you

When you combine the construction market segments together— highway/roads, bridges, all non-residential and all residential— it’s easy to understand the demand for pumped concrete is going to steadily increase. ACPA’s video, Concrete Pumping: The Future of Concrete Construction, does an excellent job of showing why concrete pumping is a critical component of the U.S. construction markets today and into the future.

There’s work. Depending on your geographic location, the volume of available and future work will vary. Like everything else, there are trade-offs. In your case one of them is finding, training and keeping personnel. This is not a new problem for the construction industry.

In early 1865, the Central Pacific railroad had work enough for 4,000 men. Yet contractor Charles Crocker barely managed to hold onto 800 laborers at any given time. Most of the early workers were Irish immigrants. Railroad work was hard and management was chaotic, leading to a high attrition rate. A decision was made to go outside the U.S. for the needed labor. Instead of Europe, the recruitment efforts were focused on China.

Within two years, 12,000 of Central Pacific’s 13,500 employees were Chinese immigrants. The number of Chinese workers on CP payrolls began increasing by the shipload. Several thousand Chinese men had signed on by the end of that year; the number rose to a high of 12,000 in 1868, comprising at least 80 percent of the Central Pacific workforce.

It’s easy to forget that we are a country that has been built on the backs of immigrants, and unless we do something to change the dynamics of domestic employment, we may be looking at a rerun of 1865.

In a recent blog, Bill Palmer of Concrete Construction asked: “Where are the workers?

“One of the greatest needs in today’s construction industry is for qualified workers. Across all sectors of the business from engineers to foremen and craft workers, the workforce is aging and there seem to be few young workers ready to take their place. During a roundtable at the ASCC Construction Executive Leadership Conference in July, the discussion focused on changing the perception of construction for young people to, as AGC states on its web page, “...show them the exciting world of construction before we are discarded as a career choice.

“The Construction Users Roundtable is taking this seriously by hosting an event on September 10 to explore ways to find and develop new leaders...

What are you doing to develop new talent for our industry?”

What’s really interesting are the comments posted on the concreteconstruction.net website.

Needless to say, all of them are facing the same problem the industry is.

What can we do?

Palmer’s final comment: “We need more success stories, like those we reviewed in our America’s Concrete Contractors, to show that construction is both exciting and financially rewarding.” It is definitely one of the things we need.

A friend recently reminded me that story-telling is one of the most effective ways of marketing and merchandising. Everyone enjoys a good story. Isn’t that what most TV programs, movies and books are? Stories.

Who better understands the benefits of pumping concrete than you? It is a very efficient and reliable means of placing concrete, which makes it a very economical way of putting it where it needs to go. Depending on the location and project design, pumping might be the only way of placing concrete. Cases in point: high-rise buildings, large slabs, pavements, footings, etc. As you know, the list of applications continues to grow. Bottom line, pumping is efficient, effective and economical.

Okay, so what are you doing—or going to do—to fill the workforce shortage? It’s a tough sell but you have personnel now who enjoy what they are doing and like being in the business. Ask them why, and include their response in the stories you tell about your successes.

What stories?

Every project on which you work, every project you complete is a story, a story that everyone wants to hear or read because people are interested in what you are doing.

Construction is an interesting business. Work with your local high schools, especially the ones that have career days and make arrangements to explain what you do and how you do it, or actually bring students to a job site so they can see your crew in action. Help them to understand that your world is interesting, challenging and full of opportunity.

Today’s technology makes it easy to take pictures and videos, and today’s internet makes it easy to post job pictures and videos online. Do it!

What we as an industry don’t do well is promote our business. There are few, if any, TV programs that focus on construction (thank God for Mike Rowe and his recent Dirty Jobs TV show); few in any movies; and nothing about concrete pumping. Why should we expect anyone to be interested in concrete pumping when only a few people know about it and even fewer know about the long term career “jobortunities” available.

ACPA has a wealth of materials available that you can use to recruit. Use it. Tell your story! Where? Local newspapers, association magazines, industry publications, community service organizations, chamber of commerce meetings, and of course through the internet, on your website and any social media accounts you have.

Remember—every job is a story waiting to be told. And when told well, your stories provide an opportunity to demonstrate your skills and proficiencies and, at the same time, attract new talent.