Gains in Construction Provide a Lift for Heavy-Haul, Crane Rental Firms
This story appears in the Oct. 17 print edition of Transport Topics.
Specialized heavy haulers and crane rental and rigging firms in the United States are seeing an uptick in business as residential and commercial construction activity continues to expand. Also, there are growing expectations that state and federal agencies will spend more on transportation infrastructure in the years ahead.
Construction spending is up 4.9% for the first eight months of 2016 and totaled $1.142 billion at a seasonally adjusted annual rate in August, according to an analysis of data by the Associated General Contractors of America from the U.S. Census Bureau.
The value of private nonresidential construction put in place was $422.4 billion in August, a gain of 4.2% for the year and the highest level since 2008, boosted by gains in the energy sector, commercial office and warehousing projects, lodging and education. Spending on private residential construction reached $449.2 billion on a seasonally adjusted annual rate in August, up 13.9% for the year, although still well below peak levels achieved during the pre-recession housing boom in 2005.
Helping to buoy the construction market are large mixed-use projects. These include projects such as Hudson Yards in New York City, the Legacy West Urban Village in West Plano, Texas, and the District Wharf in Washington, where developers are providing office, residential and retail space for growing numbers of urban dwellers. There also is strong demand for warehousing and distribution facilities throughout the country to handle increases in the volume of goods purchased online, said Ken Simonson, chief economist for AGC.
“While demand for construction remains robust, it is no longer growing like it was earlier this year,” Simonson noted. “There is little doubt that new public- sector investments in our aging infrastructure could help reinvigorate demand for construction.”
The increase in construction is nonetheless putting a spotlight on companies that specialize in providing cranes and specialized transporters for building projects.
In May, investment firm Apollo Global Management acquired one of the nation’s largest crane rental and rigging firms, Pittsburgh-based Maxim Crane Works, as well as AmQuip Crane Rentals in Trevose, Pennsylvania, a major regional operator with facilities in 36 states.
“We see growth,” said Bryan Carlisle, CEO of Maxim Crane Works, adding that the business is consolidating with Maxim making three acquisitions of smaller competitors over the past 15 months.
Carlisle said construction of medical facilities are “booming right now” and that many college campuses are adding dorms and classrooms to keep up with growing numbers of students. He also sees an increase in spending on roads and bridges despite funding limitations by government agencies. “The amount of spending has increased, and we anticipate that will continue and increase because we’re not keeping up,” Carlisle said in an interview last week with Transport Topics.
The value of public construction put in place in August was $270.5 billion, a decline of 8.8% for the year to date. Highway and street construction, the largest category, is off 8.3%. And the only sector to show an increase in spending was health care, which rose 6.2% in the first eight months of 2016 compared with the same period in 2015, according to AGC’s analysis.
In another sign of industry consolidation, Memphis, Tennessee- based Barnhart Crane & Rigging, one of the nation’s largest crane and heavy-lift specialists, acquired Sicklesteel Cranes Inc. of Mount Vernon, Washington, and Power Tower Crane, an affiliate of Sicklesteel, adding a fleet of 56 cranes and locations in Tacoma, Washington, and Portland, Oregon, to Barnhart’s network of 40 locations. CEO Alan Barnhart said the deal gives customers a broader range of services and should lower overall project costs.
Also, officials at Mammoet USA, a unit of Dutch-owned heavy-lift and transport firm Mammoet, said the company is spending $100 million to expand its fleet of transporters and lifting equipment in the United States to support industrial building projects. Those include a massive LNG export terminal in Freeport, Texas, and new petrochemical production facilities along the Gulf Coast.
Another company investing in the crane and rigging business is Bennett International Group. In 2015, the McDonough, Georgia- based holding company launched Bennett On-Site Services to provide crane, lifting and rigging services and augment the company’s portfolio of flatbed and heavy-haul trucking services. Bennett also owns flatbed and open-deck carrier Ace Doran Hauling & Rigging Co., a Cincinnati-based company that has been in business since 1913 and specializes in hauling steel and copper, oversize freight and machinery.
The two businesses work together to transport wind energy equipment. “We can safely transport every component of a wind tower,” said Rob Simon, vice president of heavy haul and specialized for Bennett Motor Express. “We can load them, transport them and build them.”
Bennett International Group ranks No. 68 on the Transport Topics Top 100 list of the largest for-hire carriers in the United States and Canada.
