Paving News & Insights
Busy Year for the Paving Industry
February 2, 2022
Paving Industry Shortages
"Order now! Supplies are limited!" We hear that all the time these days, from TV to radio to your Amazon account where there are only three boxes left—YIKES!
The creation of FOMO (fear of missing out) is the marketer’s 2022 call to arms. Unfortunately, this is one of those times.
All indications are that 2022 is going to be a busy year for the paving industry. The key word here is shortages. If you have asphalt paving, concrete, seal coating or striping needs in the months ahead, here’s why you should sign that contract now.
The Potential Shortage of Contractors
H.R. 3684, the Infrastructure Investment and Jobs Act, was signed into law on November 15, 2021. This means that federal highway and infrastructure projects will be readily available and commercial pavers who prefer this kind of work will be actively bidding on these plentiful projects. The result will be a decrease in availability of commercial paving companies.
Supply Chain Issues
Supply chain issues have plagued all types of businesses in the past 12 months and relief does not appear to be on the horizon. At Kansas Asphalt, we have struggled to keep up with demand for such things as marking paint, PPE and even material. Asphalt shortages are occurring because of a steep decrease in oil production as well as increased prices. Forbes reported a few months ago that just before the pandemic, domestic oil production was 12.8 million barrels per day. Production remained at that level despite the “double-whammy” of a price war between Saudi Arabia and Russia and growing loss of demand as a result of the pandemic. The situation became unsustainable, and the price of oil dropped so low that some producers were forced into bankruptcy. The result was the largest short-term oil production drop in U.S. history. Thankfully, the oil rig count is slowly recovering, but the downside is that it can take months at a minimum for new drilling to turn into oil production.
The Current Manpower Shortage
Finding and retaining a talented and motivated workforce is a real challenge these days. Americans are faced with childcare issues and financial woes as well as healthcare concerns and vaccine hesitancies as the pandemic continues. At Kansas Asphalt, we are fortunate to have an incredible team that is ready to start projects.
Inflation
Prices are going up. The cost of producing and trucking materials is continuing to increase with no relief in sight. As demand continues to skyrocket, the cost of construction equipment continues to rise with Ritchie Bros. reporting an over 20% increase in cost over the past year. Locking in a contract now could save you thousands of dollars in the months ahead.
But take heart! The future isn’t all doom and gloom.
Although the current economic situation is difficult, the paving industry continues to thrive. We still proudly work with the most recycled products in the world. Sustainability is our mantra, and we are constantly finding new ways to save energy, lower emissions and speed up the paving process. We employ cutting edge technology, such as high-tech paving machines that require less manpower to operate and the creation of new mix designs that incorporate post-consumer plastic into our asphalt. At Kansas Asphalt, we are excited about the future, and in these tough times, we want you, our customers, to be aware of the challenges we face so that we can provide you with the best job for the best price this season.