Quarry marks Earth Day

Eight middle school-aged students from Grace Academy, a private school in Georgetown, Texas, plunged their hands and their shovels into mounds of dirt to commemorate Earth Day by planting trees and wildflower seeds at KBDJ, a limestone quarry in Hays County. “What better way to celebrate Earth Day than by getting a little dirty?” said KBDJ President Jill Shackelford. “KBDJ is thrilled that Grace Academy traveled to the quarry to learn more about the local environment and take an active role in improving it.”

During the field trip, the students also got an up-close look at a working rock quarry and saw the steps KBDJ has taken to protect the environment and wildlife on the quarry site. “I thought it was just going to be a rock quarry,” said eighth grader Kristen Klein. “It’s much more than that.” Added Ashton Murphy, who is in ninth grade, “We’re currently studying the age of the Earth in school, so the quarry pit allowed us to see the different layers and colors of the Edwards limestone formations.”

Hays County Commissioner Karen Ford, also a member of the Clean Air Force of Central Texas, visited the event to encourage the students and to give them information on regional efforts to ensure Central Texans breathe clean air. “We’re working very hard to get the word out about what people can do to keep the air clean,” Ford told the students. “Trees help clean the air, so thank you for being here.”

With help from quarry staff and a backhoe donated by Texana Machinery, the students planted three live oak trees, which they named “Grace,” “Faith” and “Love,” at the quarry entrance along FM 967. The trees came from the tree farm at Texas Disposal Systems, and KBDJ worked with the Hill Country Conservancy to pick the appropriate type of tree to plant. Students also planted a mix of wildflowers at the quarry site, which included Black-eyed Susan, Mexican Hat, Prairie Coneflower, Indian Blanket, Lemon Mint, Bluebonnet, Plains Coreopsis and Clasping Coneflower. -- Mark S. Kuhar

Stimulus praise

In a statement released by the Associated General Contractors of America, CEO Stephen E. Sandherr praised the stimulus package and its effect on funding projects and putting people back to work. "Our member companies involved in highway and transit construction have been pleased with the speed with which the federal government and its state partners have been able to move in identifying and awarding stimulus-funded projects," Sandherr said. "Indeed, our member companies have consistently cited the transportation program as a model for being able to quickly and effectively fund projects in a way that puts construction workers back to work promptly while restoring America's aging infrastructure. Given the extremely challenging economic environment our contractors are operating in, with significant declines in private-sector construction activity, it is hard to imagine how much worse conditions would be if not for the stimulus. The bottom line is our members are eager and anxious to get to work rebuilding America's economy, and the stimulus is helping them do just that." -- Brian Richesson

World construction demand sinks

Construction activity is now falling quickly around the world, increasing the downward pressure on construction costs, according to Reed Construction Data. The construction decline is much deeper in many developing countries where investment, which includes construction, is a much larger share of the economy than it is in the U.S. Through March, U.S. GDP has dropped about 4 percent while investment spending has fallen 12 percent. Investment spending has already plunged more than 20 percent in several Asian and Middle East markets, which have experienced more frequent shutdowns of construction projects already underway than have occurred in the U,S.

World GDP fell at a 5 percent annual pace in the 4th quarter of last year and continued to decline at about the same pace through the winter. The International Monetary Fund (IMF) projects world GDP will fall as much as 1 percent this year, the first worldwide decline in 60 years. The IMF outlook foresees stable or slightly rising economic growth by the end of the year but a relatively sluggish recover in 2010. World construction activity is unlikely to return to the peak 2008 level until 2011 at the earliest.

The consequence is weak pricing for the resources used in construction. This occurred first in materials. The materials price surge that occurred in mid-2008 has now been fully reversed. Materials price indexes are likely to slip slightly lower later this year before rising modestly next year. Price declines for other project resources are harder to measure but have now begun. This includes design and contractor bidding where more competition has forced discounting. Prices for new construction equipment appears to have had little impact so far but used equipment prices are falling at a double-digit pace.

It also includes labor. Construction hourly wage gains abruptly slowed from more than 4 percent (annual rate) to below 2 percent in the last three months even though few union contracts have yet been re-negotiated in this weaker construction economic environment. Expect the pullbacks in professional fees, contractor margins and skilled labor rates to persist will into next year long after materials prices have begun to recover. Many union locals will have to anguish over contractor demands for wage concessions before the contract expires. -- Mark S. Kuhar

From dust to dust

The dust is about to hit the fan. According to NSSGA, the U.S. Environmental Protection Agency is under court order to issue a revised opacity rule by April 16. The New Source Performance Standards (NSPS) Subpart OOO is the visible emission, or opacity, standard for non-metallic mineral processing plants, which includes aggregates.

The rule limits how much visible dust is allowed to be emitted to the air from crushers, screens and conveyor transfer points. In response to a lawsuit filed last year by the Sierra Club against EPA, NSSGA has negotiated a final rule that would lessen the administrative burden on the aggregates industry.

While the Sierra Club suit claimed that the existing opacity standards are too easily achievable by industry, NSSGA's NSPS task force, using member data from 23 states and more than 600 individual source tests, discounted the environmental group's claim and proved to EPA that the federal standards do more than an adequate job of protecting public health and welfare from fugitive dust emissions from aggregate processing plants.

NSSGA will issue a summary of the final rule soon after April 16 for all members. The association will also host several webinars demonstrating the changes to the rule and how it affects their individual operations. -- Mark S. Kuhar

PCA: Home construction tied to sales

What will jump-start the home-construction market? According to the Portland Cement Association, a recovery in housing starts must be preceded by increased sales, followed by a reduction in inventory. A new PCA economic research report indicates the conditions needed for this process to begin will not be in place until mid-2010.

“Housing construction activity cannot begin until sales recover,” said Edward J. Sullivan, PCA chief economist. “Increased foreclosures, coupled with deteriorating labor markets and tight credit conditions, will delay significant sales activity until mid-2010. Improvements in housing starts are not expected to be significant until 2011.”

Although the housing recovery bill, along with bank efforts to rewrite toxic mortgages will mitigate the magnitude of potential defaults and foreclosures during the next 18 months, PCA expects a weak labor market and declining home prices will increase the number of foreclosed properties being added to the housing market inventory.

“Without further government cash injections into the banking system, tight lending standards could characterize the economy and mortgage lending through mid-2011 dragging down home sales,” Sullivan said. “Under such a scenario, the housing recovery and overall economic recovery could be delayed significantly.” -- Mark S. Kuhar

Construction outlook released

McGraw-Hill Construction, part of The McGraw-Hill Companies, has released its 2009 Construction Outlook Spring Update, providing updated 2009 forecasts of construction starts for various project types. The major findings of the forecast, authored by Robert Murray, vice president of economic affairs for McGraw-Hill Construction, include:

* New construction starts for 2009 are estimated at $463.1 billion, down 15 percent, but cushioned by support provided by the recently enacted stimulus legislation, the American Recovery and Reinvestment Act of 2009.
* Public works will see the most immediate benefit from the stimulus act, with construction starts climbing 10 percent, including a 15 percent rise for highways and bridges. Without the stimulus funding, it is estimated that public works in 2009 would have fallen 10 percent, restrained by the deteriorating fiscal health of state and local governments.
* Institutional building in 2009 will retreat 6 percent, as the weak financial environment takes its toll on educational and healthcare facilities. The stimulus funding will provide a lift to military facilities and energy upgrades for federal buildings, which will moderate this year’s overall institutional decline.
* Commercial building in 2009 will drop 27 percent, steeper than the 17 percent slide reported last year. The tight lending environment has made it extremely difficult to obtain project financing, leading to more projects being deferred or cancelled. All commercial project types will register declines in 2009, with the most severe retrenchment anticipated for hotel construction.
* Residential building in 2009 will drop an additional 31 percent, continuing the downward trend that’s been underway since 2006. Similar declines are expected for single family housing (down 30 percent) and multifamily housing (down 31 percent). Steps taken in early 2009 to address the foreclosure problem should help to ease the rate of descent for housing as 2009 progresses.

“The construction industry is facing divergent forces in 2009,” said Murray. “The economy has weakened substantially, and despite all the efforts last fall directed at thawing frozen credit markets, there’s yet to be any sign that lending conditions for construction have improved. On the plus side, the federal stimulus bill is now in place, which will provide quick support to public works this year.”
-- Mark S. Kuhar

Adding accountability

As has been reported since February, $150 billion of President Barack Obama's $787 billion economic stimulus package has been designated for infrastructure projects around the country. The end result, of course, would benefit the aggregates industry. But sometimes it's difficult to know whether these funds are really being used in the way they were originally intended. On March 20, Obama announced guidelines aimed at preventing waste and fraud and limiting the influence lobbyists will have in carrying out the program. His guidelines specify that stimulus funds can't be used on projects like aquariums, zoos, golf courses, swimming pools, casinos and other gambling establishments. The law specifies states will lose their funds if they miss a deadline or don't allocate the money fast enough - keeping them on their toes. Obama also said priority will go to projects that will create the most jobs, including those that will help rebuild roads and bridges. Loads of information on the stimulus package can be found at www.recovery.gov, including links to states' progress and resources. -- Brian Richesson

Against all odds

In setting up the Pit & Quarry booth at the Orange County Convention Center in Orlando last week, I wasn't sure what to expect in the way of turnout for the AGG1 show that would begin the next day. It was the debut of the National Stone, Sand & Gravel Association's AGG1 Aggregates Forum & Expo. The new show is an "all-in-one" event for the association, combining its annual convention and many of its yearly offerings into one setting.

And it was coming at a bad time.

Reports of attendance at other industry trade shows this year -- such as World of Concrete -- have been bleak, and there was little reason to believe AGG1 would fare any better. One very active member of NSSGA told me if this year's new show didn't fly, there would be little hope of holding the event next year ... in Ohio ... in February.

NSSGA had assured the media that advanced show registration was high, but I took that with a grain of salt given the swift downturn of the economy. While a successful show was in everyone's interest, I was skeptical -- and I wasn't the only one.

Tuesday morning arrived, and we walked through the front doors of the convention center to discover a throng of people gathering to take the escalators down into the exhibit hall. My coworkers and I looked at each other, knowing this was a good sign. And when we entered the show floor, the aisles and booths were filled with people.

Nearly every exhibitor we spoke with was surprised and pleased by the turnout. And some equipment manufacturers have already committed to 2010 with even larger booth space. Attendees were pleased, too. There was a lot of equipment to see and a wealth of educational seminars to attend.

The success of AGG1 2009, against all odds, has set up NSSGA for a successful 2010 event next February. See you in Cincinnati. -- Darren Constantino

Aggregates prices rise

According to Reed Construction Data, the Construction Materials Price Index fell 0.6 percent in February extending the decline since the September peak to 9.1 percent. The spike in prices earlier in 2008 has now been more than reversed. The index stands at only 0.5 percent higher than a year ago. The price index is expected to decline slowly for a few more months but rise modestly by the end of the year and rise higher next year, perhaps up 4-5 percent from the 2009 average.

The Construction Sand, Gravel and Crushed Stone price index actually rose, gaining 0.9 percent month over month, 2.3 percent over a three-month period, 6.3 percent over the past year and a whopping 24.3 percent over the past three years. Cement prices declined 1.1 percent after very little price decline over the past year. But this is not yet reflected in concrete products prices which generally rose slightly.

February’s price drop was lead by steel products. Structural steel prices fell 2.9 percent with similar drops for steel pipe and builders’ hardware and a smaller decline for metal plumbing fixtures. Nonferrous price changes were missed in February. Extruded aluminum prices fell 3.2 percent but copper pipe and tube prices jumped 5.8 percent as copper ore and scrap prices both increased sharply. The countercyclical move in copper prices is supply driven and likely short term. -- Mark S. Kuhar

AGG1 a success!

The just-concluded 2009 World of Asphalt Show & Conference and co-located AGG1 Aggregates Forum & Expo were an unqualified success, posting strong attendance numbers despite a down economy and travel restrictions by many companies. The shows were held March 9-12, 2009 at the Orange County Convention Center in Orlando, Florida. With final registration numbers of 5,800, including 16 percent international, the co-location meant a big attendance boost for World of Asphalt, which had attracted about 3,650 to its last show, held in 2007. And, it provided a very strong start for the inaugural AGG1.

“The comments we heard from attendees were very positive, that the trade show floor was where they needed to be to keep in touch with what’s happening in their industry segments,” noted Show Director Sara Truesdale Mooney. “We’re very gratified by the response and recognition of our shows, and exhibitions in general, as a quality environment for networking and commerce.”

Attendees came from more than 60 countries besides the United States, including all major world regions. Official delegations came from China, India, Mongolia and Russia. Nearly 70 percent of attendees hold key management roles in their companies. Nearly 400 exhibitors took 85,900 net sq. ft. of exhibit space at the shows to showcase their latest technology and products.

“The aggregates and asphalt industries are integral to each other, so the co-location of AGG1 and World of Asphalt gave attendees access to the whole spectrum of products and services ‘from rock to road,’ as we like to say,” stated Rick Feltes of Lafarge North America and NSSGA’s AGG1 Management Committee Chairman. -- Mark Kuhar

Media outreach

Recent items we've posted here encourage aggregate producers to improve their relationship with the community through positive stories in the media. This is easier said than done, but it is possible. Working as a newspaper reporter and copy editor for about 10 years, I've been on the other end of the process. I have some insight as to how producers can get their stories in print. It starts with giving the media a reason to write about or televise your operation. Host a community event, an open house, a school tour. If you're doing this already, that's great. But you can strengthen the impact by inviting the media to cover these events. You'll need to touch base with the newspaper's editorial department (where the stories are generated). Find out who covers your community or general assignments for the local newspaper, and pitch your event in that direction. Also tell the reporter that great photo opportunities exist at your operation. This positive media coverage will provide a welcoming face to your operation and help build a relationship the community needs to understand the aggregate industry. -- Brian Richesson

Restoration by the river

One of our previous items referred to the sometimes-negative perception communities have when quarries exist within their borders. We mentioned how aggregate producers should reach out to their communities with positive stories in the media and through plant tours. We came across something recently that made us think about this relationship with the community and how one producer might be nurturing it. Rockville, Md.-based Aggregate Industries restored the historic Hayfield Manor, a pre-revolutionary Georgian manor built on the banks of the Rappahannock River and located just outside Fredericksburg, Va. The manor was abandoned, vandalized and on the Association for the Preservation of Virginia Antiquities’ most-endangered list before Aggregate Industries’ stabilization and renovation project began in 2006. Hayfield now offers the house and surrounding property as an alternative venue for meetings, events or lectures, making it an active part of the community. The ultimate goal for Hayfield is to expand education about the house, the restoration project and the mining practices taking place on the property and the importance of mining in everyday life. Visit Hayfield's web site by clicking the link above and view some nice photos. If aggregate companies can help develop more community projects like this, maybe critics will be swayed, relationships will improve and our industry will be better off in the long run. -- Brian Richesson

Kremer honored with Wendt Award

The National Stone, Sand & Gravel Association named Randy J. Kremer, vice president-manager of construction materials for Watsonville, Calif.-based Granite Construction Inc., recipient of the 12th annual Barry K. Wendt Memorial Commitment Award for his dedication to the construction aggregates industry, his family and his community. The award was conceived and is judged by the Manufacturing and Services Division of NSSGA comprised of companies that manufacture and market equipment or provide services to the aggregates industry.

Over the past 35 years, Kremer has helped to bring Granite Construction from a singular, albeit vertically integrated, role as a heavy civil contractor to become a nationally recognized aggregate, asphalt and concrete construction materials supplier. Along the way, Kremer also has been a tremendous champion for the aggregates industry.

"It is fitting that such a respected leader of our industry is honored with the Wendt Commitment Award," said NSSGA President and CEO Joy Wilson. "In my dozen-plus years with the association, I have personally seen Randy's commitment to association operations conferences, and to Board, political, policy and technical activities. He has insisted on the highest-quality all-volunteer-led education offerings that could be developed for the AGG1 Academy. He looks ahead for the workforce of tomorrow. We are deeply thankful for his efforts at NSSGA and, undoubtedly, he has helped better not only ours but all of the organizations in which he has become involved."

The award is named for Iowan Barry K. Wendt (1946-1997), a Cedarapids, Inc., employee and industry leader who was universally recognized as a leader in the aggregates industry. He had served as chairman of the Manufacturers Divisions of both the former National Aggregates Association and National Stone Association. Each year, the Memorial Commitment Award goes to an individual who exemplifies the qualities of leadership and commitment demonstrated by Wendt. It is the association's highest individual honor and service award. -- Mark Kuhar

Community involvement

We ran news recently of a Saint Index survey of the most unwanted real estate projects in U.S. communities. Landfills were most reviled at 78 percent, while casinos (77 percent), quarries (62 percent) and nuclear power plants (60 percent) followed. Personal experience leads me to believe that landfills rank No. 1. My parents live near a landfill in Northeast Ohio – in the same house where I grew up. Their frustrations stem from a number of factors – an unsightly heap of land nearby, the smell of garbage, the constant worry that the air and water could be contaminated, sinking property values. They feel officials aren’t trustworthy and people are making money at others’ expense. This survey and my family’s experience make me wonder how quarries fit into all of this. If residents have similar feelings toward aggregate producers, what can be done? I believe the answer falls under communication and action. Talk to the community, utilize the media to tell positive stories and conduct plant tours to explain the importance of your work – and simply show you care. And maybe this is already happening. The Saint Index survey, which polled 1,000 adults nationwide, also showed that opposition to quarries fell 2 percent from a year ago. -- Brian Richesson

PCA looks beyond stimulus

According to John Shaw of the Portland Cement Association (PCA), additional funding for transportation and infrastructure is needed that directly addresses our deteriorating roads and bridges. “There are many commendable portions of the economic stimulus bill, but there is still much work to be done,” Shaw, PCA’s senior vice president of government affairs, said. “The best way to get America working again is through the most measurable metric – road and bridge construction. We hope that Congress will continue to address our nation’s crumbling infrastructure and continue putting Americans back to work by making transportation-related legislation a priority in the 111th session.”

PCA studies report that infrastructure funding creates jobs on both an immediate and long-term basis in all areas of the economy. For every 10 construction jobs created by a project, the community gains 17 additional jobs that stay in the region.

Repairing our nation’s infrastructure will not only add jobs, but can put money back in the pockets of motorists. According the 2009 American Society of Civil Engineers Report Card for America’s Infrastructure Americans spend 4.2 billion hours a year stuck in traffic at a cost to the economy of $78.2 billion, or $710 per motorist. Additionally, congestion on our crowded roadways contributes 27.2 million tons of carbon dioxide emissions each year.

Shaw stresses keeping the states and local agencies accountable for the money that has been allocated to them is vital to moving the economy forward. “The Administration has recognized the importance of transparency and accountability for the programs within the bill. Our infrastructure must be constructed with the highest quality materials that reduce future maintenance and ensure durability,” Shaw said. “By investing properly we can free up more money for states and communities to use for vital services like schools and police.”

For example, according to Shaw, concrete pavements can last up to 30 years or longer before resurfacing is required. Asphalt needs to be resurfaced every 8 or 9 years. “It is an economical and sustainable choice for meeting our growing infrastructure demands.” -- Mark S. Kuhar

AGC lauds economic stimulus bill

Industry experts and association heads are now weighing in on the American Recovery and Reinvestment Act of 2009. “In just a few short weeks President Obama and Congress have created real and meaningful opportunities for unemployed workers and struggling businesses that will counter the effects of the economic downturn," said Stephen Sandherr, chief executive officer of the Associated General Contractors of America. "They understand that significant investments in infrastructure and construction projects can play a vital role in our economic recovery. Millions of construction workers and tens of thousands of construction companies are now ready to lead the way in proving them right.” Your comment?

AGG1 is the one

NSSGA needs your attendance at AGG1. Click here to register for the show, being held March 9-12 at the Orlando County Convention Center in Orlando. This registration will provide a show badge to the expo floor and allow you to purchase tickets for as many AGG1 Academy education sessions as you’d like to attend. You’ll also be able to find information on housing, tours, the MSHA Law seminar and information about the World of Asphalt – co-located with AGG1. Your comment?

Senate passes stimulus bill

After days of leading bipartisan negotiations, Sens. Ben Nelson (D-Neb.) and Susan Collins (R-Maine) announced late on Feb. 6 an agreement on an amendment to the Economic Recovery Act now being considered in the Senate. The Nelson/Collins amendment reduces the total cost of the package to $780 billion, which is $110 billion less than the original Senate stimulus bill.

The amendment keeps the highway spending mark at $27 billion plus the additional $5.5 billion proposed for supplemental discretionary grants for surface transportation, including highways. This amendment replaced the entirety of the original bill and all amendments proposed or passed during the Senate's debate of the issue last week.

However, the Nelson/Collins amendment does include two amendments that already passed with broad support: a $15,000 tax credit for 2009 homebuyers and a tax deduction for those who purchase a new car. With these additions, the grand total of the bill rises to $827 billion. "This deal represents a victory for the American people," said Collins. "We came together to tackle the most immediate problem facing the nation." She went on to say, "This bill is not perfect, but it represents a bipartisan, effective and targeted approach to the crisis facing our country."

Yet Republican congressional leaders have expressed misgivings about the stimulus package. Sen. John Ensign (R-Nev.) and Rep. Mike Pence (R-Ind.) voiced the concerns of many Republicans that the legislation has too much spending and not enough tax cuts.

Consideration of the bill resumed on Feb. 9 with a roll call vote of 61 yea, 36 nay on the motion to cut off debate on the Nelson/Collins amendment. The amendment was passed on Feb. 10 by a vote of 61 to 37. Only three Republicans supported the amendment: Sens. Susan Collins and Olympia Snowe of Maine, and Arlen Specter of Pennsylvania. Final passage of the Senate stimulus package occurred shortly after on a vote of 61 to 37. Senate conferees named were Sens. Daniel Inouye (D-Hawaii), Max Baucus (D-Mont.), Harry Reid (D-Nev.), Thad Cochran (R-Miss.) and Charles Grassley (R-Iowa).

Significant differences exist between the House and Senate versions of the economic stimulus package, primarily over tens of billions of dollars in aid to states and local governments, tax provisions and programs for education, health and renewable energy. For instance, the Senate devotes $27.06 billion to highways, while the House allots $30 billion.

The bill now proceeds to Conference committee to reconcile differences between the two versions. Each chamber will vote on the Conference Report and, if passed, the stimulus will be sent to the president for signature.

NSSGA continues to contact members of the House and Senate to stress the importance of the transportation infrastructure portion of the economic stimulus package to the aggregates industry and urge the highest funding level possible.

Materials prices decline

According to Reed Construction Data, the construction materials price index dropped 7.8 percent from September to December and is expected to decline, albeit more slowly, through the winter as worldwide commodity demand continues to shrink. Commodity prices fell in January again for metals, lumber and some energy based products because construction activity and manufacturing production are now declining in most major countries and commodity inventories are well above normal levels. Preliminary data put the January price decline at more than 20 percent for aluminum, 10 percent for steel and 10 percent for lumber, 7 percent for diesel, less than 5 percent for copper but no decline for cement. Futures prices and inventory levels suggest that spot prices will continue to fall for several more months. Lumber futures prices are 30 percent below spot prices. Crude oil storage facilities are full with some product now being stored on anchored tankers. Your comment?

AEM pushes stimulus bill

As you probably know, the Senate will vote shortly on the economic stimulus package. AEM has been in constant communication with Washington leaders to inform them of the best ways to help the industry and AEM member companies put people back to work. The economic recovery package will likely be the biggest spending bill in U.S. history, and the scope of the bill affects AEM member-company interests in many ways.

AEM is actively lobbying in support of proposals to:

• Increase the proportion of spending in the bill devoted to infrastructure investment,

• Improve the business tax relief provisions,

• Streamline environmental reporting requirements so that infrastructure projects can get underway with a minimum of delay,

• Strengthen the provisions of the bill aimed at revitalizing the nation’s housing market, and

• Prevent inclusion of protectionist language that would anger our international trading partners and provoke retaliatory measures, threatening our member companies’ overseas markets.

This last provision, known as "Buy American," has engendered a great deal of controversy, and AEM is working with like-minded allies – including business as well as lawmakers, academics and international trade experts – to prevent it from harming AEM member companies' access to markets and infrastructure projects in the U.S. and overseas. President Obama has urged Congress not to include any provision that U.S. trading partners would consider protectionist, which could cause U.S. companies to potentially be shut out of projects included in stimulus packages being written in other countries. Your comment?