|
Optimism has returned in CalAPA's annual survey of Asphalt Insider readers, a sharp contrast to recent years of COVID and post-COVID pessimism.
The 15th annual CalAPA "Better or Worse" survey found respondents much more bullish about the year ahead than they were a year ago, although there was plenty of uncertainty expressed in written comments about work-force availability and the regulatory environment.
The brief, non-scientific poll of more than 2,600 "Asphalt Insider" newsletter subscribers, conducted over the past month, found overall optimism up compared to last year, with 55% of respondents saying 2025 would be better than 2024. Thirteen percent said 2025 would be “worse” than 2024, and 28% said they thought the coming year would be “about the same” as 2024. About 1% of respondents answered they were unsure or had no opinion.
“2024 was a very busy year for us,” one consultant commented. “I expect 2025 to be the same.” Added an asphalt producer: “Significant work in our area for 2025.” That same sentiment was offered by another asphalt producer: “Strong backlog.” A paving contractor from Southern California described the market this way: “Better backlog and more work to bid.”
The jump in optimism was the largest year-over-year increase in the survey’s history, and many of the survey respondents referenced the outcome of the presidential election in their answers. Last year, the number of respondents who said 2024 would be better than 2023 stood at 30%, which was down slightly from the 32% recorded the year prior. Those who said 2024 would be worse than 2023 came in at 32%, also down 2 percentage points from the year prior. In last year’s survey the biggest percentage of respondents, 35%, said they did not know if the coming year would be better or worse, which was up from 29% the year prior. It was the first time since 2013 that more people chose “Don’t Know” over “Better.” As we reported at the time, the big “Don’t Know” number may have been influenced by ambiguous reports about the state of the economy heading into a presidential election year. As noted in this year’s CalAPA Asphalt Market Forecast for 2025, those fears about the economy did not materialize as inflation eased and the Federal Reserve lowered interest rates.
Still, the survey numbers this year fall short of the heady days in 2017 and 2018, when the passage of SB1 promised to funnel billions of dollars to deferred pavement improvement projects. In 2017 the “Better” figure was 62% and 2018 was at 67%, an all-time high for the survey. The “worse” tally in 2017 was just 5%, the all-time low for the survey, and the 2018 figure was 5%. While additional funds have flowed to transportation, less has been used for pavement improvement projects than anticipated.
The all-time high for the “Worse” number was recorded in 2022 when 34% of respondents said they believed 2023 would be worse than 2022 as the state and the nation continued to recover from COVID-19 pandemic disruptions.
The levels of pessimism in recent years has not approached the dire numbers recorded in surveys taken during the depths of the last major economic downturn in the state, however. In 2011 the share of survey respondents who said the coming year was going to be better was just 20%, the lowest ever recorded in the survey. The same year the number of respondents who said 2012 would be worse stood at 22% -- substantially more pessimistic than this year’s 13%.
Workforce issues, a persistent theme in the survey in recent years, plus concerns about the regulatory environment, were on the minds of many who responded to this year’s annual survey.
“Qualified help, in the office and in the field,” lamented one asphalt producer that also has a paving division. “Finding qualified employees,” noted another asphalt producer. A paving contractor described the challenge this way: “Retaining competent younger workers.”
The CalAPA Board of Directors highlighted this trend in its most recent strategic plan update, and the association has initiated numerous workforce recruitment and retention activities, including launching a workforce-centric charity, the California Asphalt Research & Education Foundation. The Women of Asphalt California Branch has also placed workforce recruitment and development at the center of its many activities.
As has been revealed in past surveys, finding qualified personnel is a challenge also faced by agencies, although there were not as many agency comments on this topic as in the past. One agency manager lamented, “We are losing track of the basics.”
Many comments about transportation funding tended to be dour. SB1, the $50 billion Road Repair & Accountability Act of 2017, has reached the seventh year of its 10-year implementation horizon, and a new $1 trillion federal infrastructure bill passed in late 2021 also promised to infuse more money to pavement repair. However, there are persistent reports that those dollars are not showing up in pavement repairs, the bread and butter of the asphalt pavement industry. A comprehensive CalAPA analysis of Caltrans data validated those anecdotal reports. Several survey respondents complained they have not seen road repairs at the level that was promised to taxpayers and long-suffering commuters when SB1 passed.
“Don’t see any significant public works funding,” one industry respondent said. Another added, “HMA tonnages are down, and costs (labor and materials) continue to rise.” Still, a few saw some bright spots, including the passage of local tax measures that will generate road-repair funds.
For the ninth year in a row, the survey added an optional question, “What is the No. 1 challenge where you work?” That question elicited more than 70 written responses. As it has in recent years, work force issues continued to dominate the comments. Next were supply chain issues, the economy and inflation, and the regulatory environment.
As the workforce ages and enters retirement or moves to other fields, the survey suggests, the churn in personnel continues to place stress on industry and agencies alike.
Government regulations were also top-of-mind for many who took the survey. One private industry respondent described the regulatory environment thusly: “California employment laws." Another commented, “California regulations and associated costs to comply.”
The main CalAPA survey question is purposefully vague: "For your company or organization, how do you think 2025 will compare to 2024?" However, most of the voluntary comments offered up by survey respondents to justify their opinion centered around how much work is expected in the coming year. The answer varied by company, agency and region, reflecting the size and diversity of California's massive economy and the economic micro-climates that are spread across the vast state.
As in previous surveys, the weather largely depends upon where you are standing. Some respondents commented that work was brisk, while others were disappointed, particularly in some rural areas of California.
Given the forum, some respondents took the opportunity to share a pet peeve. “Too many layers of bureaucracy,” one agency representative said. Another agency person commented: “Specification, policy and procedural changes that are illogical and undeliverable.” Yet another agency person complained about “designers pushing paving projects out in August or later.” Predictably, lawyers also were the source of derision.
One paving contractor offered up a comment that could likely resonate with just about everyone: “Our No. 1 challenge is navigating the rapid pace of technological change while ensuring that we maintain a strong focus on cybersecurity and data privacy.”
A total of 115 people took part in the voluntary on-line survey, which was conducted from Nov. 4 to Nov. 18. To read the story about last year's survey results, click HERE. On Dec. 2, CalAPA members will be sent an exclusive comprehensive analysis, “2025 Asphalt Market Forecast for California.” The highly regarded publication, in its fourth year, is filled with data and insight available nowhere else. Additional forward-looking information will be featured in the 2025 Forecast Issue of CalAPA's official magazine, California Asphalt, which will hit mailboxes in January.
| 
