Asphalt and Paving in Summer 2020
Predictions and analysis of the demand for paving work that will be done during the summer of 2020
COVID-19 Has Changed Almost Everything
It’s safe to say that COVID-19, the novel coronavirus that originated in Wuhan, China in late 2019, has changed the world. Almost every facet of life is now different. Masks are required in public, and in many other enclosed spaces (as well as private businesses). Large-group get-togethers like concerts won’t be happening any time soon. Almost every aspect of life has changed, and most of it for the worse.
Additionally, business is down in general. Restaurants and entertainment venues are operating at half-capacity if they’re open at all. Many businesses have closed, and won’t ever reopen.
But what does that mean for paving works this summer? Roads are still being traversed, and parking lots still need to be safe for vehicles and pedestrians alike.
You’ve come to the right place to get that exact question answered.
Asphalt and Paving Works in Mid-2020
So, what about construction, and specifically paving? Riding in hot from a strong market in 2019, the asphalt and paving industry look to be in for a great 2020.
But what about the market downturn? How has that changed the outlook for paving projects?
Fortunately, asphalt and paving seem to have weathered the storm. As we move into the middle of the year and safety measures are solidly in place against the virus, this corner of the world can move on with just a few key safety measures in place.
With “shovel ready” projects booked from 2019, plus some hefty government funding, 2020 looked to be a boon year for the paving industry. Federal highway funding increased by $6 Billion in 2017, from $46 Billion.
Despite cautioning that business might take a serious downturn in March, however, it seems most projects have been going on as planned. Paving, particularly as infrastructure, is essential for any community, and so the paving workers were considered essential.
Here are some of more reasons why the paving industry can plan full steam ahead this year:
- Incomplete projects from last year. Federal funding for 2019 wasn’t released until February 2019, so many 2019 projects are still incomplete and need to be finished this year instead.
- 2020 Funding was allocated in December 2019. This means that 2020 projects could be backed-up by two years’-worth of funding.
- FAA Airport Improvement Program (AIP). This 2020 and 2019 program provides grants to public (and sometimes private) organizations. The grants are designed to aid the planning and development of public-use airports.
- America’s Transportation and Infrastructure Act of 2019. This bill does quite a lot to keep the paving industry moving:
- It increases funding for tribal and federal lands transportation programs.
- The bill “requires the Department of Transportation to encourage each state to develop a voluntary plan that provides for the immediate and long-term personnel and workforce needs of the state to deliver transportation and public infrastructure projects.”
- And so much more—read the bill for yourself here.
As midyear approaches, it seems that paving and asphalt projects are still going strong. However, it also makes sense to have some cautious optimism. Here are some other factors to consider.
Roughly 65% of paving and asphalt project funding comes from the federal, state, and local government. The other 35% comes from private markets, both commercial and residential. Government money is fairly reliable, since once a bill becomes law, the funding appears. The private market, however, is much more volatile.
In the case of a disastrous second-wave of COVID-19 cases throughout the U.S., it’s possible that the private market could take a swift downturn. Additionally, as states open up and numbers of infections start to climb again, there could be another devastating market downturn. Businesses that aren’t open, schools that aren’t running, and government buildings that are shut down won’t need paving services.
It’s difficult to predict how demand will change exactly for construction services like asphalt paving. There are several reasons, among them:
- Much of paving needs to be done during low-business times. If a business is shut down, and has the liquid cash needed to get by until it reopens, it could go through with a paving project it had planned anyway. The project needs to be done—and with no clients, the construction can be done more easily and far faster.
- If businesses don’t survive however because of virus levels spiking and causing closures, then demand will correspondingly decrease.
- The stay-at-home-effect. In the case that lock-downs are again used, with only essential workers going about their business, it would be a perfect time to get city, highway, and other public works paving projects complete. The fewer people on the roads, the more efficiently workers can do their jobs.
- Demand from government sources seems to be steady in the storm. An internet search for “paving projects summer 2020” reveals many cities and states going about their asphalt paving projects undeterred. As of late March (after lock downs and social distancing measures began in many states), asphalt and paving projects in almost all states were nonetheless ongoing.
We’re Still Here for You
If you need a paving project done in, you’ve come to the right place. Reliable Paving is a professional, high-quality, and extremely experienced paving contractor. With over 35 years of experience, we have the know-how and expertise to solve your paving needs.
Come to us for asphalt paving, concrete repair, seal coating, and parking lot striping. We ensure success and guarantee satisfaction. Is your project a big one? With 19 crews and over 200 employees, we can handle large-scale projects skillfully and deftly. Contact us today to see why we are the local leader among paving companies in Arlington, Texas.