“My crystal ball is cloudier than ever, but homebuilding and home renovation look like they have a lot going for them with super-low interest rates likely to last for a long time,” Simonson says. “I think all residential markets should do better on the single-family side. With multi-family, it’s going to be mixed. Those high-rise, high-density, high-priced units are probably going to lie untouched for a long time. But the lower-density garden apartment kind of thing, there may be a good market for that.”
In contrast, Simonson is not as optimistic about private nonresidential construction.
“There’s selected improvement,” Simonson says. “If you’re working on creating more distancing in an office or maybe a screening area and so forth, or on other public facing buildings, there will be a lot to do. Converting big box stores or anchor stores and malls to local distribution facilities, that looks good. The already-hot data center market, that looks good. But for most types of private nonresidential construction, I think 2021 is not going to be a good year.”
As for public nonresidential funding, Simonson says the state of that market largely hinges on whether the federal government takes action.
“On the public side, it really depends on the federal government stepping up and putting more money into infrastructure or into helping state and local governments,” Simonson says. “We did see after the financial crisis of 2008, when President Obama took office and a new Congress was seated, they passed the American Recovery & Reinvestment Act in just four weeks. So Congress can move fast under the right directions. I’m not ready to give up on seeing public funding in 2021.”
Given the uncertainty of federal funding, Scepaniak and his company are proactively planning for whatever may come their way in the new year.
“We’re trying to prepare as best we can for some slower economies in certain working areas,” says Scepaniak, whose company operates across the Upper Midwest. “A lot of the rural areas that depend on agriculture to generate dollars for local infrastructure, we think those might be a little slower in the spring. It’s not uncommon for us to go put up a stockpile – 50,000 or 100,000 tons – for a farmer that he utilizes gravel out of. To that point, the rural areas we think might be quiet, based on weaker agriculture prices.”
Like Simonson, Scepaniak anticipates abundant opportunities in residential construction in 2021.
“We do think, with super-low interest rates, the housing market is going to continue to be strong, and that helps us in terms of asphalt aggregates [and] concrete aggregates,” Scepaniak says. “We think metropolitan markets and developing suburban areas are going to maintain strength throughout the end of this year and hopefully into 2021.”
Once again, though, the challenges that loomed throughout 2020 are likely to continue into 2021, as well. The uncertainty surrounding both the pandemic and federal infrastructure funding remain, but so do reasons for optimism.
“I’m still cautiously optimistic that 2021 could be another good year,” Wise says. “There are a lot of things that need to fall in place. If we get COVID under control, get an infrastructure bill and get just some of the uncertainty in the market cleaned up, I think that would put a lot of these projects that are on hold to probably give them the green light and we could have another good year.”
Featured image: Portable Plants staff