Incoming NSSGA chair shares outlook on road ahead

Jim Nickolas, executive vice president and CFO at Martin Marietta, will become chair of the National Stone, Sand & Gravel Association (NSSGA) during the organization’s March 23-26 Annual Convention in Nashville. Nickolas will succeed Seth Hankowski, senior vice president at All States Materials Group, as NSSGA chair.

Ahead of the convention, Pit & Quarry connected with Nickolas to capture his industry outlook, as well as his goals and priorities for NSSGA in the year ahead.

How would you characterize the state of the aggregate industry at this moment as you prepare to become NSSGA chairman?

On balance, the aggregate industry is in excellent shape as we enter 2024’s construction season.

After a slower-than-expected rollout, the industry is now experiencing the tangible benefits of increased infrastructure work from the passage of the Infrastructure Investment & Jobs Act (IIJA). The increase in aggregate demand driven by that act should provide a stable base of business for several years, mitigating any temporary softness seen in other end markets.

The explosive growth in demand for generative artificial intelligence (AI) in the United States will likely lead to another wave of construction over the next one to four years due to the need for related data centers, which are different than traditional data centers. More specifically, AI data centers use different racks and chips and consume three times the power of traditional data centers.

In addition to the construction of new AI data centers themselves, there will be a need to construct substantial new power generation facilities.

I think there is a newfound appreciation for the intrinsic value of aggregates. Last year, the national average price of aggregates outpaced inflation, and Wall Street equity analysts forecast that to repeat in 2024.

That recognition of our products’ inherent value allows the industry to ensure that wages are commensurate with our need to compete for talent, replace and upgrade machinery and equipment, and invest in technologies that make our operations safer and more efficient.

The United States aggregates industry – and the general construction industry – is in a good place, and it is expected to get better. I think that view is widely shared as manifested by the number of companies listing their shares in the U.S., either as newly public companies, existing public companies moving their stock exchange listing from an overseas location to one in the United States, or global companies separating and spinning out North American operations from a global structure.

The secret is out: It’s good to participate in the U.S. aggregates and construction industry.

What industry issues do you foresee having to tackle in the next year as NSSGA chairman, and what would you ultimately like to accomplish when your tenure is said and done?

We need to vigilantly watch for new regulations or laws that can weaken the industry and, in turn, the overall durability of the American economy.

Other industries are lobbying for preferential treatment with regulations that would unduly disadvantage the aggregates industry. We still have old regulations that also remain an open issue, such as Waters of the United States. We need to play defense on those issues and careful offense on others.

I’m stepping into a role with a one-year term. That’s not a lot of time to effectuate change. Fortunately, NSSGA is a healthy and extremely well-run association, and so I don’t see a need for dramatic changes within the association.

I’d like to use my time in the role to help push change externally. I’d like to go on offense when it comes to how the federal government funds the country’s highway construction and maintenance. I would like to begin a meaningful dialogue among federal legislators about how best to adequately fund this vital investment in a nonpartisan way.

We can’t wait until the current act expires and then begin the dialogue. It’s too late and too political at that point to have a productive discussion about substantive change.

We’re in Year 3 of the Infrastructure Investment & Jobs Act. Is the next highway bill becoming a bigger priority at this stage?

It is the right time to begin meaningful discussions about the next highway bill. However, it is an election year, and so while the groundwork needs to be laid in 2024, the discussion likely won’t become productive until 2025, when we know which political party will control each key institution. Then, we may have the ability to chart a potential legislative path forward.

This will need to be a multi-industry effort centered on a well-conceived and executed plan.

As we progress through Year 3 of the IIJA and begin advocacy efforts for a future highway bill, we must continue to focus upon the monumental difference infrastructure projects make in our communities. The IIJA continues to create jobs, strengthen communities, make travel safer and greatly improve the ease with which goods are transported. By highlighting these successes – which occur in communities large and small, rural and urban – we will effectively support the fact that infrastructure spending is not a partisan issue, but one that affects all Americans.

What impact might the 2024 elections have on your ability to get things done or move things forward on behalf of the industry?

An election year likely means very little gets done legislatively. We need to lay the groundwork in 2024 for advancing our goals on the policy front in 2025. However, the bulk of our efforts in 2024 will be focused on minimizing the harm coming from new regulations.

Anything else you’d like to add related to your term as NSSGA chairman?

No matter how large or small, individual aggregate producers or aggregate equipment manufacturers and service providers cannot successfully effectuate change at the federal level. We need to stay united in our collective actions while advocating for policy changes that aid our industry and the nation.

Joining and participating in NSSGA is the best method for organizing and channeling our resources to effectuate real and meaningful change. We’ve been successful in the past, but we need to keep reinvesting in NSSGA to continue the good work.

I want to see increases in small producer membership and more widespread participation from our large and small producers. The more companies that join NSSGA and contribute to ROCKPAC, NSSGA’s political action committee, the more effective it becomes. A more effective NSSGA means greater success for its member companies and, ultimately, greater success for our entire industry.

Related: What to expect at the NSSGA Annual Convention