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Industry hardens on cement jobs


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10:00 PM PST on Sunday, February 10, 2008

By JAHMAL PETERS
jpeters@thebizpress.com

With several cement companies filing notices with the state of their intent to lay off more than 100 employees, the industry is anything but set in concrete.

TXI Oro Grande Cement, located 10 miles north of Victorville, and Oldcastle Precast Inc. in Colton both filed layoff notices with the Employment Development Department's Worker Adjustment and Retraining Notification program.

TXI will release 72 employees in March and Oldcastle Precast released 33 employees last month.

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Photos By Dan Elliott
Riverside Cement Co. TXI in Oro Grande near Victorville.

The job losses reflect sagging industries that depend on concrete and cement.

"This time last year I was going so fast I couldn't keep up with the work," said Matt Blaylock, a spokesman at Oldcastle Precast Utility Vault in Fontana. "Now it's been a complete 180, I'm bidding on jobs that I wouldn't have a year ago."

Oldcastle specializes in precast concrete, building structures out of concrete and shipping them to the client.

The company constructs underground vaults for clients such as Verizon and Southern California Edison, Blaylock said.

Oldcastle boomed in the late 1990s when California environmental laws forced service station owners to install double-wall fuel tanks to safeguard against oil leaking into ground water.

But the need for expansion has slowed dramatically due to the downturn in the housing market, he said.

According to the Construction Industry Research Board, only 213 single-family building permits were filed in December 2007 compared with 707 permits in December 2006.

Multifamily permits increased to 178 permits in December, compared with 13 in December 2006 but industry officials feel the increase is not enough to renew demand of concrete.

"A single-family home uses a lot more concrete than a multifamily complex," said George Huang, an economic analyst with the San Bernardino County Economic Development Agency. "If you're building an apartment, one unit may be two or three rooms and a garage. You save a lot of exterior walls by doing multifamily."

A mere two multifamily permits were filed in November and a total of 71 for the two months prior in Riverside County.

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TXI Oro Grande Cement reports slack demand.

The pattern held consistent in 2006 when multifamily permit numbers spiked to 213 in November, only to dip to 13 the next month.

Generally when the housing market slows, demand for supporting infrastructure such as strip malls and supermarkets increases, Blaylock said.

"Once you have the housing, if 20,000 people move into the neighborhood, schools, supermarkets and strip malls are needed to support these people," he said.

But that has not been the case in the current market.

"We're in February, I haven't seen the infrastructure keep up with housing," Blaylock said.

The transportation sector has seen a drop in production as well, limiting its need for concrete, said Frank Sheets, a spokesman for TXI.

Part of the stagnation in the transportation sector is due to funding, he said.

"We're waiting for the state to put out millions of dollars," Blaylock said.

Earlier this month, Gov. Schwarzenegger pushed for the speedy release of $29 billion in unallocated funds from the 2006 infrastructure bonds.

"Listening to what's happening on the federal level, we think it's probably going to start turning around toward the end of this year," Sheets said.

"When I started in 1993, we were just coming out of a turn," Blaylock said.

"It took about three years for everything to come back strong again."

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