Precast Inc. - March/April 2008 - (Page 32)

NPCA photo BRENT DEZEMBER, STRUCTURECAST BONNIE WASSON, U.S. CONCRETE PRECAST GROUP – PHOENIX market to be much tighter with contractors undercutting each other.” Rasmussen isn’t getting into that game. “We do not do that. Never have and never will,” he said. “Let’s hope for a better 2008 than we all expect.” Catching up in Phoenix In Phoenix, Bonnie Wasson, general manager with U.S. Concrete Precast Group, does business in a once-hot market that after several years of tremendous growth started cooling off toward the end of 2006. While U.S. Concrete Precast Group-Phoenix has a wide-ranging operation, it has felt the effects of a drop off in the areas residential work. The Phoenix area experienced a 200plus percent increase in housing starts in the last few years, Wasson said, from 30,000 to 65,000. “We have a lot of investors here with two, three or four homes, and now there are a lot of foreclosures taking place. The next six months will be a good indication of what we can expect for the next 5 years.” Housing starts have dropped back to the 30,000 range, which is actually a more realistic level, Wasson added. “It’s not gloom and doom. We need healthy growth, not out-of-the-box growth. Still when you build your business up to support those 65,000 housing starts and now that it’s down to 30,000, you definitely need to make some changes.” As in Florida, the Phoenix area is playing catch-up from rapid residential growth, leaving U.S. Concrete Precast Group with plenty of opportunities as infrastructure continues to build up around new residential areas. “Commercial and highway work is better. We have a lot of catching up to do, which is probably going to mean a pretty strong 2008, although not as strong as 2007.” Wasson has two words of advice for precasters concerned about the economy: “Get lean,” she said. “When I talk about getting lean, it’s not just your staff and your processes. It’s also with your material suppliers and other vendors. It’s across the board. Look around and get focused with your quality and safety. Those are items that can cost you a lot of money. Look at your various departments and your company overall and get lean.” California backlog Our cross-country economic journey ends in California, where Brent Dezember’s StructureCast company does business in Bakersfield, near the southern end of the San Joaquin valley, about 120 miles north of Los Angeles. The housing bust in California hasn’t adversely affected StructureCast because it sells very little to the residential market, but Dezember has noticed an overall slowdown. “Our backlog for this year is the same or a little better than last year, but we are noticing fewer opportunities are hitting our desk at this time,” he said. “So I think that means that there is probably going to be a slowdown, but most of our business is commercial construction and it really hasn’t slowed yet. That’s the good news. The bad news is that most of those projects are on the books for a year or two before they get to us, so if they’re not getting on the books now, that means next year or the year after is going to be slow.” As a result, Dezember said he is grabbing as much work as he can. “I don’t know if this is the right approach, but that’s what we’re doing now,” he said. “We’re trying to build up as much backlog as we can and do whatever we can to get backlog. We’re looking at jobs a little farther away than we generally haul the product, and maybe jobs a little bigger than we normally would do. We’re going to shoot for two to two and a half years of backlog and see how we weather the storm.” Like most precasters in our sample, Dezember remains fairly optimistic about 2008 but a little guarded about what lies beyond. “I think in 2008 we’re going to have a good year,” he said. “I’ll call you back in 90 days if I’m wrong, and maybe you’ll have some floors I can sweep down at the office.” 32 MARCH/APRIL 2008 | PRECAST INC. NPCA photo

Table of Contents Feed for the Digital Edition of Precast Inc. - March/April 2008

Precast Inc. - March/April 2008 Contents Technically Speaking Concrete Repairs Return-to-Work Programs Marketing in a New World Building Confidence Risk Management Culture Bloquea La Energia – Es Tu Vida! Lock It Out – It’s Your Life! Fiber Optics in Countertops MCPX Wrap-Up Product Profile People & Products Advertisers Index NPCA Calendar

Precast Inc. - March/April 2008

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