Johnson: Bailing out the states not necessarily the solution

By |  September 4, 2020
ConExpo Roundtable


My crystal ball is cloudy. Some states are running short of matching funds, and Congress doesn’t seem inclined to do much – or, at least, it doesn’t seem inclined to do nearly as much as requested.

It’s difficult for Congress because some states are doing OK and some aren’t. So who do you bail out and to what extent and why? Besides, money is fungible, and the Obama administration’s stimulus for infrastructure never seemed to reach its intended targets. So I’m leery of Congress even getting involved.

I’d like to see more infrastructure spending, but I believe it needs to be equitable among the states. If North Carolina is shutting down infrastructure projects because they are running out of matching funds, but South Carolina, Georgia, Texas and Florida aren’t, then why should North Carolina be bailed out? Or, why should Congress give more money to all of the states simply because some are struggling due to mismanagement and poor policymaking?

I see demand shortcomings in infrastructure, but only in some states. The states that still have money may slow down their infrastructure spend because funds are running low and replenishment is inadequate.

Sector breakdown

The residential sector is boosted by low interest rates, but it’s hindered by uncertainty. I still see the migration from high-tax to low-tax states continuing, so that’s good for Texas and Florida and bad for New York, New Jersey, Illinois, Connecticut and others. I don’t see much growth in multifamily, as that’s likely been overdone somewhat already.

Nonresidential is a big question mark, with remote work and home schooling picking up in popularity due to COVID-19. Will schools and offices continue to be built? The same goes with hospitals and medical facilities: Many are losing money now, but the future may be bright. Then again, telemedicine is picking up steam through the COVID-19 crisis, as well. 

There is a lot of uncertainty, and everything’s changing very fast. Hold on tight!

Dan Johnson is vice president of The Concrete Company, which is based in Columbus, Georgia.

Editor’s note: As part of our Road to Recovery coverage, P&Q is turning to some of the industry’s leaders for their takes on the road ahead. Leaders such as Alexander were posed with the following question: As you look to the remainder of 2020, what factors give you reason for optimism about the aggregate industry?

Featured image: PamElla Lee Photography

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