No more multi-year highway bills?

In his Innovation NewsBriefs e-newsletter, public policy consultant Ken Orski suggests the days of multi-year transportation bills may be over. "Long term authorizations have been a longstanding feature of the federal-aid transportation program," Orski says. "They have been justified by the need for contract authority, i.e. ability for state DOTs to make binding financial commitments for major multi-year projects in advance of annual appropriations. But there is a growing sense among the lawmakers on Capitol Hill," Orski continues, "that Congress may be forced to abandon the practice of multi-year reauthorizations." He says the current fiscal and political environment makes it almost impossible to raise hundreds of billions of dollars in a single legislative package.

Orski points to an unfunded shortfall in the highway trust fund: "At current levels of expenditure, a five-year authorization would require approximately $260 billion," he says. "Highway trust fund revenue and interest over the same time frame is projected to generate $175 billion, leaving an unfunded shortfall of approximately $85 billion. For a six-year bill, the unfunded shortfall would reach $100 billion. Where is that money to come from?

Hence, short-term bills (annual or bi-annual), requiring only relatively modest amounts in offsets or general fund supplements may become instead the accepted practice," Orski concludes. He says that given the Senate barely came up with enough funds for a two-year bill, and the House has no plausible funding for its five-year bill "suggests that the days of multi-year transportation authorizations may indeed be over." -Darren Constantino

As seen on TV

In a television commercial for the Audi A6 automobile, the company extols the virtues of its “intelligent” car in a world that’s less than perfect for driving. “Across the nation, over 100,000 miles of highways and bridges are in disrepair,” says a voice-over. I guess I wasn’t the only person to notice it. I read other accounts of the ad spot on the web, mostly from people advocating the need for investment in transportation infrastructure.

And there’s another commercial in the spotlight. A radio/television ad featuring Presidents Ronald Reagan and Bill Clinton that talks about transportation infrastructure has won a 2012 Hermes Award, given by the Association of Marketing and Communication Professionals. The ad, developed by the American Road & Transportation Builders Association and the American Public Transportation Association, won the Gold Award in the audio advocacy category and received an honorable mention in the TV advocacy category.

We’ve often discussed the desire for such advertising at our Pit & Quarry roundtable. Almost every year at this event, someone mentions the need for getting the message out to the public. The beef industry had “It’s What’s for Dinner” and the dairy industry had “Got Milk?” to promote their products. Many in our industry have a desire to deliver a similar message. The public needs to know that pits and quarries produce the material that is used for building our roads and schools. Public awareness would help get highway bills passed and might even make it easier for producers to obtain mining permits.

Thank you, Audi, for adding to the voices calling for the need of infrastructure investment, and for delivering the message directly to the public. -Darren Constantino

Aggregates demand to increase sharply after 2013

The drop in aggregates consumption during the past five years has been unusually large owing to the recession (of course) and the sharp decline in aggregates intensity. Aggregates intensity has dropped by more than 37 percent since 2006. No doubt the high intensity level of 2006 was unsustainable, but the low level we have today is also unsustainable.

(Note: We are using Aggregates/Employment as a measure of intensity. Aggregates/Employment equals aggregates volume divided by the level of U.S. employment. For example, in 2008, U.S. aggregates consumption was 2.4 billion metric tons and total U.S. employment was 145.2 million workers. The ratio is 16.5 and is shown as aggregates intensity; the amount of aggregates used per employee.)

The low aggregates intensity level in 2012 is one reason we are near a bottom in aggregates demand. The low volumes for 2012-2013 in our forecast are due to the continuation of low intensity values. The slowdown in nonbuilding work, which has a higher aggregates intensity ratio, is the main reason for the low current levels. Since we think nonbuilding will be a lagging segment for construction activity for the next two years, aggregates demand remains in a holding pattern.

When state and local budgets regain their balance as the economy recovers, the intensity ratio will once again move up. By 2016, the intensity level will recover to near its 2008 level. This means aggregates demand will increase strongly after 2013 as aggregates plays catch-up to higher economic output. -David Chereb

Change for the better

Pit & Quarry has been around for a long time -- nearly 100 years. Just before I first started on the magazine in early 1988, the parent company was Harcourt, Brace, Jovanovich (HBJ). Beginning soon after, as is often the case in the world of business-to-business publishing, ownership changed hands on a regular basis. We went from HBJ, to Edgell Communications, to Advanstar Communications, to Questex Media Group, and now, as of yesterday, to North Coast Media. This latest change is an exciting one, because we are now part of a new, smaller, more-focused business that will enable us to make changes more quickly and further invest in our offerings. Over time, you'll see the changes in the form of a redesigned magazine, redesigned website and more digital offerings. Stay tuned. -Darren Constantino

More than a magazine

Two big news stories have been in play as we’ve gone to press with each issue this year. There is Martin Marietta Materials’ hostile takeover bid for Vulcan Materials Co., and then there’s the ongoing political struggle to get a multi-year transportation bill passed in Washington. As with any weekly or monthly periodical, the story has often changed by the time the publication reaches its subscribers.

That is why we post breaking news on our website, Twitter, and the Pit & Quarry Facebook page. And, unlike some other industry information sources, the news we post is specifically of interest to North American aggregate producers.

We also deliver the news directly to you through our P&Q Weekly Report e-newsletter. More than 5,000 subscribers receive it by email, and those same subscribers also receive our special e-newsletters live from major industry trade shows. Do you get the free P&Q Weekly report? If not, sign up here.

Plus, the Pit & Quarry YouTube channel offers videos from equipment manufacturers, as well as videos taken by Pit & Quarry at industry trade shows. Most recently, our video camera detailed the happenings at the AGG1 Aggregates Forum & Expo in Charlotte, N.C.

In regards to our monthly magazine, it is available electronically, as well as in print. The electronic “digital edition” is viewed by thousands, and allows anyone with an Internet connection to read the magazine.

The 100th anniversary of Pit & Quarry is just four years away. For the first 80 years of its existence, Pit & Quarry was simply a print magazine. But in the past 15 years, we have evolved to deliver news and information in the most timely manner using the latest technologies available.

Stay tuned, because we will soon be offering even more ways to stay in touch with the industry. -Darren Constantino

Website: www.pitandquarry.com
Twitter: twitter.com/pitandquarry
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The industry is changing

Pit & Quarry magazine has been around for nearly 100 years, and looking through old issues, I’m struck not by how much things have changed, but by how much things have stayed the same. Go to the “Looking Back” page at the end of most of our issues, and you’ll often see 50-year-old equipment that doesn’t look all that different from what you use today.

The same holds true when looking at old pictures of association meetings. Women now have a larger role in our industry, including Joy Pinniger as president of the industry’s national association, but this is still very much a male-dominated industry.

However, some things are beginning to move forward. The change is driven by two things: the heightened sensitivity of the public to environmental concerns and the desire of aggregate producers to be more efficient.

We all know it has become more and more difficult for producers to obtain operating permits. In an effort to keep their environment clean, water safe and neighborhood quiet, citizens often don’t want pits and quarries in their backyard. Of course, it’s not only our industry that is affected. All mining and construction now is done under a watchful public eye.

This has led to green construction and the sustainability movement. And while many producers view this as a negative, it is actually a tremendous opportunity. “Some small companies may perceive the sustainability trend as a threat to their business,” says Michelle Keil, sustainable development engagement manager for Caterpillar Inc. “They may miss opportunities for obtaining bids,” she says.

In the coming years, companies that follow sustainability practices, including aggregate companies, will more likely get jobs and sell product.

In regards to the other big industry change – equipment and technology – much of it was on display at the AGG1 Aggregates Forum & Expo in Charlotte, N.C. Driven by new technologies, much of the equipment used in the industry is getting smarter, cleaner and easier to operate. And the changes are accelerating. Keep watching the pages of Pit & Quarry as we bring it to you every month. -Darren Constantino

Finding perspective

The last five years as senior editor of Pit & Quarry magazine have taught me to view things differently today. It’s easy to take our nation’s infrastructure for granted – most noticeably the roads and bridges that keep us connected as well as the buildings in which we live, work and educate our kids. This is the basis of our everyday lives, and none of it would be possible without the aggregate producers – from the mom-and-pop operations to the giant public corporations – who supply these important construction materials. That’s what I take away from these last five years – a better understanding of how our nation builds itself up through the hard work of its aggregate producers. I’ve had the opportunity to meet these good people and tour their operations, and for that I’m thankful. It’s a perspective I hope others across the nation will see and understand. Now, I’m moving on to another magazine within Questex Media and saying goodbye to Pit & Quarry and Publisher Rob Fulop, Editor in Chief Darren Constantino and Sales Manager Dino Vitanza. They are the rocks of this magazine. – Brian Richesson

Rally for Roads

It’s rally time. The second annual Rally for Roads will take place at 11 a.m. March 20 on the National Mall in Washington, D.C. Members of 15 transportation construction industry associations, including NSSGA, will join together to show their support of a fully-funded, multi-year transportation bill. The rally will showcase the role transportation plays on stimulating the economy, maintaining the nation’s global competitiveness and creating American jobs. The rally will feature employees from all facets of the road construction industry, including materials providers, road pavers and equipment manufacturers and dealers. – Brian Richesson

ROCKPAC donors and recipients

As we move through the year toward the November elections, Pit & Quarry will be reporting on the contributions of the National Stone, Sand & Gravel Association's ROCKPAC political action committee. To date, ROCKPAC has donated $115,500 to congressional candidates – $90,500 to House candidates and $25,000 to Senate candidates. The PAC has given 79 percent of its contributions to Republicans and 21 percent to Democrats, the highest percentage it has given Republican candidates in 10 years – since the 2002 cycle. The PAC's largest contributions thus far have gone to:
• House: Tom Latham (R-Iowa) $5,000; Jim Gerlach (R-Pa.) $4,000
• Senate: Olympia Snowe (R-Maine) $3,750; Bob Corker (R-Tenn.) $3,250; Roger Wicker (R-Miss.) $3,250

Click these links for an up-to-date list of:
• Individuals donating to ROCKPAC
• Candidates receiving money from ROCKPAC

We will keep you updated on ROCKPAC contributions through this election year. -Darren Constantino

The rise of manufacturing

One particular manufacturer in the aggregates industry is telling its success story to the nation. McLanahan Corp., maker of aggregate-processing equipment, is coming off one of its best years ever, according to Michael McLanahan, its fifth-generation chairman and CEO. Find out why in this McClatchy Newspapers article. – Brian Richesson