In 2007, America was in the throes of one of the worst recessions since the Great Depression, driving the cost of everything from gasoline and fuels, oil based materials and construction materials to an all-time high. Today, according to the American Association of State Highway and Transportation, the recession driven prices have dropped dramatically. —
"Since August is one of the busiest months for roadway infrastructure projects across the United States, the fact that DOTs are seeing the lowest asphalt prices for this month since 2007 means they can stretch their project budgets to cover more work," said Bud Wright, executive director of the American Association of State Highway and Transportation Officials, in the AASHTO Journal in August, 2016.
In Ohio, the DOT experienced nearly a 50% drop in asphalt pricing in 2016. Priced at $587 per ton for any binder grade asphalt in 2007, today's cost is a mere $303 per ton for the same product. This cost reduction allows many state DOTs, including Ohio, to perform more repairs and resurfacing projects for a lower budget.
“The cost of materials has a major impact on the ability to complete jobs within a set budget,” commented ACS Asphalt Concrete Solutions, Inc. co-founder, Jeff Taylor. “We're able to bid lower, thus passing the savings on to our clients.”
As the premier commercial paving contractor in the upper Midwest, ACS Asphalt works closely with asphalt and concrete producers in Minnesota and the surrounding states. The plummeting cost of materials has brought about an increase in projects for the company and many commercial paving contractors nationwide.
“Right now is the ideal time to do repairs and resurfacing or complete replacement of paved surfaces that have been put off due to the higher prices for the materials needed,” Taylor continued. “Some of our customers are moving forward with projects that they would not have without the lower cost of asphalt.”
The effect of the reduced pricing and increased projects at both the state and commercial levels has brought about a supply and demand backlog for asphalt and concrete producers across the country. In addition, lawmakers have the opportunity to fund more and more state level transportation projects.
Wright said in the AASHTO Journal, "There is a huge backlog of projects that would improve mobility but need funding. Lawmakers could be getting a much bigger return now, when key materials costs are low, by investing in projects that build economic strength for decades to come."
With petroleum based fuel prices dropping over the past few years, it is only to be expected that oil based products such as asphalt would experience an equal decrease in cost. According to the US Energy Information Association, as of August 8, 2016, the average pump price of gasoline was $2.15 per gallon, a drop of 30¢ per gallon from one year ago.
“This trend is not going to go away anytime soon,” Taylor offered. “The entire American economy is driven by oil prices and as they drop, it affects a great deal of industries that depend upon petroleum based materials and fuels. Both state and private commercial paving companies are finding it a welcome change.”
For more information from the AASHTO Journal, visit www.aashtojournal.org
For a FREE evaluation of commercial paving projects, contact ACS Asphalt Concrete Solutions at 1.800.BLACKTOP or visit www.acsasphalt.com
**JD Arbuckle is a freelance journalist specializing in consumer education on a variety of topics including the American economy, construction and commercial paving.
Release ID: 131880