This Issue: Heavy-Civil Construction
The
Construction Industry Newsletter spoke with the consultants in
the Heavy-Civil Division at Kimmel & Associates to hear their
opinions on trends in the market and their forecasts for the next
few months and years.
Calvin
Allen serves the Heavy-Civil market for the Southeast.
CIN: You
work several states. What's going on in some of your territory?
CA:
North Carolina is looking at a huge backlog in highway work and
maintenance. There is talk of a toll road scenario developing for
I-95 through North Carolina. I-95 is drawing a lot of attention,
in fact. It’s overloaded, and might be facing a $9B overhaul
and widening.
CIN: What
do you see elsewhere?
CA: There
are all kinds of innovative ways that cities and states are finding
to pay for huge projects. Some Interstate work might have, for
example, 80% Federal and 20% State funding. Cities like Atlanta
will have a bond referendum that eventually settles into a situation
where taxpayers, the city, the DOT and other sources end up funding
the project.
CIN:
Interesting.
CA:
In fact, speaking of DOTs, I see another trend there. They’re
drawn more and more to design-build work.
CIN: Why?
CA: Because
the company they hire is responsible for the design and therefore
the state gets a static price without any big financial surprises.
I see that developing over time as a way states will want to go.
CIN: You
do a lot of work in Water and Wastewater. What’s happening
there?
CA: The
EPA has passed strict new codes for water purity. Deadlines to
meet those restrictions are kicking in for small municipalities,
which struggle to pay for them. So lots of communities are teaming
up to form Metropolitan Sewage Districts to spread the cost to
3 or 4 towns. These Metro Sewage Districts become a political entity
that doesn’t answer to anyone, but it’s an effective
way for the small towns to keep up.
David
Goodrum serves the Heavy-Civil market on the West Coast.
CIN: What
building trends do you see specific to the West Coast?
DG: There’s
a big increase in the number of projects devoted to mass transit
right now out West. Light rail connecting cities to towns and suburbs.
As subdivisions grow into towns, they’re going to need and
demand infrastructure projects like that.
CIN: You’ve
been doing a fair amount of work in the Pacific Northwest lately.
DG: Well,
there’s a lot to be done. The Pacific Northwest is a hotbed
right now for new bridge construction and bridge retrofit.
CIN: How
about California? What do you see there?
DG: The
money for highway work is still coming in consistently from the
Federal Bill in 2005; Schwarzenegger is an advocate of spending
it on new highway work as well as upgrades.
CIN: Is
any part of the state of particular interest to you right now?
DG: California
as a whole is always dynamic. San Diego and LA continue to grow
together into one giant metropolis. Therefore, there’s a
big need for underground infrastructure, wet utilities, roads … as
well as the engineers, project managers, and estimators who can
build them all.
Taylor
Maurer serves the Heavy-Civil market for the Northeast.
CIN: What
has caught your attention lately as you watch the market?
TM: The
Eisenhower Highway System is turning 50 years old, so we’re
definitely going to see a wave of expansion and reconstruction
on the Interstates.
CIN: What
else?
TM: It’s
no great insight to say that Metro areas such as Washington and
the New Jersey corridor have terrible gridlock; I think those places
are going to approach solutions from a new angle. We might see
more toll roads and public-private partnerships to solve the problems.
CIN: What
trends other than on the highways do you see?
TM: There’s
lots of marine construction … piers and shipping. Old ports
are being re-designed to accommodate oversized freight ships. Lastly,
I see a push for L & G construction - liquid and natural gas
- because any perceived petro crisis like we’ve seen this
year always gets people scrambling for alternative fuel sources.
Steve
Deweese serves the Heavy-Civil market for the Rocky Mountains.
CIN: What
are you seeing in the Rockies?
SD: There
is huge population growth in Las Vegas, Phoenix, and Denver. The
highway system and other infrastructure are struggling to keep
pace with the rate of population increase. Therefore, there is
a tremendous effort underway to expand highway building, including
roadways, bypasses, loops, everything. I see greater blending of
public and private funds to accomplish these essential jobs. These
are immediate needs.
CIN: Why is this segment of the industry fighting to stay on top
of its workload?
SD: The
people in the business are top-notch, but there is a definite shortage
of technical talent and manpower entering heavy-civil construction.
Grads from CM and Civil Engineering programs are drawn, right now,
to construction in the pharmaceutical, medical, computer and other
high-tech fields. The dirty hands positions are falling behind.
CIN: What’s
the solution?
SD: Construction
is, like most enterprises, cyclical. Eventually the supply will
catch up to the demand; it always does. That’ll be forced
by greater rewards for the companies that can meet the demand.
Make no mistake, these projects have to be – and will be
- built.
Broc
Fountain serves the Heavy-Civil market for the Midwest.
CIN: What’s happening in the Midwest? Boom, bust, or somewhere
in between?
BF: The region as a whole is still benefiting from the Transportation
Bill of 2005. Money is coming in, sometimes in a trickle, sometimes
in much greater quantities than that.
CIN: Where are you seeing activity?
BF: Chicago is the strongest market – it’s rolling right
now. Roads, tollways, bridges, underground, utility …everything
has heavy growth right now. It’s exciting.
CIN: What other market is strong?
BF: A new highway is going up from Evansville to Indianapolis over
the next 4-5 years; that’s going to be a massive job that’ll
bid out in 2007; companies from Indiana all the way over to Illinois
will try to get a share of that work.
CIN: Are there builders to do the work?
BF: The greatest need is for estimators who can handle a broad range
of heavy-civil work, from highway to water and wastewater.
CIN: Several of you have mentioned water and wastewater.
BF: There is a sharp increase now in municipal demand for new facilities;
the Mom-and-Pop operations are fighting to get business against
the larger companies, which have the ability to create a big water
resources department and tackle many jobs of various sizes.
CIN: I keep hearing you five say there is a need for builders who can
do heavy-civil work.
BF: It’s true. These companies don’t have enough people
to get the work done. The work is going to continue to expand,
and the talent pool has been shrinking; the challenge is, and will
be, to deepen that pool as time goes by.
Thank
you, all.
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