Building Boom, Need for Speed
Driving Concrete Demand

by Bruce Buckley

A construction boom coupled with designers and contractors looking for faster and better ways to deliver projects for owners have created an ideal environment where concrete innovation has thrived in recent years.

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Although the acceptance of new technology in concrete has traditionally been a slow and methodical process in the United States, market forces have converged to drive the use of more emerging mixes and applications.

Demand for Concrete

As with many building materials, increased construction activity nationwide has spurred greater use of concrete. In 2006, consumption of Portland cement, a main ingredient in concrete, is expected to reach a record 124 million metrics tons-reflecting 2.3 percent growth over 2005, according to the Skokie-based Portland Cement Association. Even as construction activity is predicted to cool in 2007, the market should record another 1.3 percent gain in 2007.

Rising costs over the past five years of other building materials, such as steel, have helped contribute to the popularity of concrete. Additionally, durability and speed of delivery have been factors. With owners looking to have projects completed faster, use of precast concrete has risen dramatically. In 2005, use of precast increased by 17.5 percent compared to 2004.

Ty Gable, president of the Indianapolis-based National Precast Concrete Association, said precast has reached greater popularity as owners request more fast-tracked projects and contractors struggle with labor shortages.

"It's more and more of a challenge on the jobsite to get the skilled labor necessary, so architects and designers are turning to precast get jobs done faster," he said.

In many cases, they also want them to last longer. Durability has become an increasingly important element of the developer's equation on infrastructure projects, especially as more private entities have begun to invest in roads and bridges, said Steve Kosmatka, vice president of research and development at the Portland Cement Association.

"Public-private partnerships create an opportunity for people to use innovations, as opposed to the standard designs that have been in the books for 30 years," he said. "PPPs are willing to take risks especially if they see it reduces maintenance. Banks that look at these projects want technology that will allow contractors to put down a bridge or highway that won't have to be touched for years."

The trend is promoting greater interest in use of ultra-high performance concrete, also known as reactive powder concrete, which is nearly five times stronger than conventional concrete. Although it has been used abroad, researchers are testing it here in the U.S., including a new bridge built in Iowa that is the first in the country to use the material.

Michigan's Department of Transportation and University of Michigan scientists are testing the use of a new fiber-reinforced "bendable" concrete, also referred to as engineered cement composites concrete. Because it can bend, ECC reportedly is less likely to crack and fail. It's also nearly 40 percent lighter than conventional concretes.

"Traditionally, DOTs have been very conservative-they don't want to take risks," Kosmatka said. "To see them take an interest in doing these things on their own is very promising."

Despite early progress, the same barriers to acceptance remain-without broadly recognized specifications and testing methods, limited numbers of engineers will take risks on new materials.

"You can't go to the building codes and find out how to use these materials," Kosmatka said. "The average engineer at the average firm wouldn't know how to use them."

Industry Red Flags

The two biggest concerns from 2006 - labor and materials - will still challenge contractors and make them scramble on occasion to meet busy schedule demands.

With residential market slowing, that should ease demand for materials, along with providing plenty of low-end laborers.

Fluctuating material costs and availability have leveled off for the most part, although items such as copper wire and asphalt oil are expected to be volatile.

Cement powder shortages from 15 months ago have dissipated, and right now the industry seems sufficiently stocked up.

"We're optimistic that (2007) will be a good year," said Scott Parson, president and CEO of Staker & Parson Companies of Ogden.

"Transportation construction should be strong. Some of the supply struggles we've have should decrease with careful management. We have more concerns with asphalt, but we're working to secure other supply sources."

"We're a little concerned with asphalt oil," added Jim Harper, president of Harper Ready-Mix in North Salt Lake, "but supplies of cement should be good."

Paul Franz, 2006 president of the Idaho AGC and manager of Idaho Concrete and Asphalt in Coeur d'Alene, Idaho, said the price of asphalt oil has soared in recent months.

"It used to be that asphalt came off the bottom of the barrel, but (oil refineries) have learned how to make the bottom of the barrel into diesel and gas, so instead of getting a below market rate, we're paying market rate," said Franz.

There is also still a high demand for all housing materials, said Doug Young, manager of Pacific Supply in Salt Lake City, despite prices that continue to creep up across the board.

"We've seen an unprecedented run of quarterly increases," said Young, whose company sells drywall, roofing, masonry, waterproofing and cultured stone, among other items. "(2006) has been a tremendous year for us, and we think 2007 will be strong, too."

Young said roofing supplies have risen quarterly by 7 to 10 percent for about two straight years, while items like gypsum have averaged 10 to 15 percent increases. He said complaints are still heard, but contractors have realized that it's a case of supply and demand.

"In years past contractors would battle an increase (in material costs) more than they do now," said Young. "They still resist price increases, but they understand it now more than years past. When (increases) happen less often, (contractors) are less likely to accept them. Price increases have happened so often and so regularly, that contractors have become accustomed to it."

The outlook isn't very sunny on the labor side of the industry either, where shortages of skilled craftspeople have everyone scrambling to fill jobsite positions. Wages are also expected to rise, as constructed-related firms will be forced to pay for qualified people.

"The biggest challenge with labor is going to be wages," predicted Thorn. "I think you're going to see wages spike across the board - whether it's craftsmen, laborers, project managers or superintendents. In some areas, it's a long time coming."

"Construction wages have been growing slowly," said Ken Simonsen, chief economist for AGC of America. "We'll probably see some pickup in wage growth for highly skilled workers. At the low end, there should be an abundant supply of workers."

"Material pricing and supplies is all manageable," added Matt Rich, business development director for Jacobsen Construction of Salt Lake City. "The bigger concern is labor shortages. There are a finite number of people to build these projects. Labor is a concern on the management side as well."

Parson said companies who are experiencing labor shortages need to boost internal training and recruiting efforts.

"We're doing more internal training and stepping up our recruiting efforts," said Parson. "That's been successful for us."