TACA meeting draws producers to San Antonio

The Texas Aggregates & Concrete Association (TACA) hosted more than 450 attendees during its 67th annual meeting at the JW Marriott San Antonio Hill Country Resort & Spa.

According to TACA, a meeting highlight was a state and national economic report. TXP Inc.’s Jon Hockenyos, whose firm offers economic analysis and focuses on public policy, presented the report.

“While both Texas and the U.S. are close to resuming ‘normal’ activity, a full recovery has yet to occur,” Hockenyos says. “However, in the months to come, I believe we are looking at a new version of the ‘roaring ‘20s,’ due to low interest rates, pent-up demand for travel and social experiences, and a lot of stimulus money being pumped into the economy.”

Hockenyos cited U.S. GDP in the first quarter of 2020 as coming in at 0.3 percent and, after the most dramatic dip of 9 percent in the second quarter last year, GDP is now back up to 0.4 percent in the first quarter of 2021.

Hockenyos pointed out Texas’s dramatic growth, as the state currently represents 8.9 percent of the nation’s population and accounted for 32.4 percent of net national population growth in 2020. Texas has created a huge demand for housing, industrial and warehouse construction, Hockenyos adds, but the state is experiencing slower demand for office, lodging, entertainment and medical facilities – largely due to societal changes during the pandemic.

Hockenyos predicts there will be a rise in public spending in the next few years that benefits those in Texas who supply the materials that build public and private infrastructure, including roads and highways, bridges, schools, hospitals and residential and commercial structures.

Hockenyos, however, warns of several factors that may hamper the industry – including demand for materials outstripping supply chains and the rising price of materials. In addition, he cites servicing the national debt in the long-term and rising inflation in the near-term as factors that could hamper expected growth.

“When inflation starts to warp your business decisions, we know it is a problem,” Hockenyos says.

Other takeaways

Separately, Abbott Lawrence, chairman of the board of the National Ready Mixed Concrete Association (NRMCA), told TACA Annual Meeting attendees that, in 2019, Texas ranked No. 1 in spending on roads and highways.

In 2020, Lawrence says Texas producers shipped 61.8 million cu. yd. of materials, with California a distant second at 37.8 million cu. yd.

Of the top 20 aggregate demand regions in the U.S., Lawrence says four are in Texas – Dallas, Houston, Austin and San Antonio – with three in Florida and two in California.

Additionally, Michael Johnson, president and CEO of the National Stone, Sand & Gravel Association (NSSGA), warned that the U.S.’s economic competitors are investing strategically in infrastructure as a means to take America’s status as the No. 1 economy in the world – just as the quality of U.S. infrastructure continues to decline.

“The U.S. got just a C-minus and Texas only got a C in the American Society of Civil Engineers’ latest Report Card for America’s Infrastructure (issued every four years),” Johnson says. “We can and must do better.”

Johnson is optimistic about Congress passing legislation that will make significant investment in infrastructure this year, but he cautions that when the investment comes, regulations “that are not built on sound science” could make it more difficult to access the aggregate and produce the construction materials that are needed.

Josh Leftwich, TACA president and CEO, agrees that adequate infrastructure is paramount to Texas’s success.

“With population growth comes the need for more shopping, medical support and, of course, education,” Leftwich says. “I know our industry will be there to support these efforts and supply the best materials we can. We look forward to providing the solutions to this unprecedented growth.”

Information for this article courtesy of the Texas Aggregates & Concrete Association.