SIC 2951
ASPHALT PAVING MIXTURES AND BLOCKS



This category describes companies principally employed in manufacturing asphalt and tar paving mixtures and paving blocks made of asphalt mixed with other materials.

NAICS Code(s)

324121 (Asphalt Paving Mixture and Block Manufacturing)

Industry Snapshot

The asphalt paving mixtures and blocks industry was poised for good times in 2000, with increases in road construction imminent after passage of federal legislation. Highway construction in the private sector, a fairly good indicator of general economic health, was increasing about 11 percent annually in the late 1990s and was expected to reach $55.2 billion in 2000. The demand for mixtures should parallel this growth. In the late 1990s, roughly 1,100 establishments were involved in the production of asphalt paving mixtures and blocks. The vast majority of these employed fewer than 20 workers, while only 16 employed more than 100. The industry's total shipments reached $6.4 billion in 2000, up more than 20 percent since 1996 and 35 percent since 1994.

Asphalt is a blackish-brown material with a consistency ranging from a viscous liquid to a glassy solid. Most asphalt is obtained as a byproduct of the distillation of petroleum or other materials. Natural asphalt, rarely used by the 1990s, is formed during the early stages of the breakdown of organic marine deposits into petroleum.

Asphalt is used most often in the construction of roads, parking lots, walkways, and other paved surfaces. Of the 2.27 million miles of paved road in the United States, 94 percent of them are surfaced with asphalt, including 65 percent of the interstate system. With the passage of the Transportation Efficiency Act, those figures are expected to increase substantially by 2010.

The primary advantages of asphalt—over concrete—are cost, flexibility, and durability. Because it softens when heated and is comparatively elastic, asphalt offers a high degree of adaptability in construction applications. Its physical properties also make it less susceptible to cracking and weathering; it is also more resistant to salts and chemicals used to clear and maintain roads in inclement weather. Furthermore, asphalt is easier to remove and costs much less than either concrete or natural paving materials. Finally, asphalt is 100 percent recyclable. An entire road surface, for instance, can be excavated and remixed for use in new surfaces.

The main asphalt paving product is hot mix asphalt, in which asphalt cement is used to bind a mixture of stone, sand, and gravel. The hot mix asphalt (HMA) industry employed about 300,000 people in the late 1990s. Another 600,000 jobs revolved around the HMA industry. This included workers and administrators involved in paving activities and was not limited to companies primarily engaged in production of paving mixtures. Organizations involved in this industry are the National Asphalt Pavement Association (NAPA) of Lanham, Maryland, and the Asphalt Institute's National Asphalt Training Center II in Lexington, Kentucky.

Background and Development

Historic uses of asphalt date back to 3000 B.C., when natural asphalt was used to seal a reservoir at Mohenjo-Daro, Pakistan; it was later used throughout the Middle East to pave roads and seal waterworks. Pitch Lake on the Island of Trinidad was the first large commercial source of the material. The development of petroleum-based materials such as asphalt during the eighteenth, nineteenth, and twentieth centuries gradually replaced natural supplies.

The demand for asphalt that accompanied the post-World War II economic expansion in the United States drew primarily on petroleum-based supplies. By the early 1990s, asphalt paving mixture producers used more than 50 million barrels of asphalt per year, selling more than $4 billion worth of mixtures and blocks annually.

Asphalt sales in the final decades of the twentieth century generally mirrored the health of the overall economy, expanding throughout the 1980s from about $3.0 billion in 1982 to more than $4.5 billion by 1988. The glut in construction in the late 1980s and early 1990s, in part a result of the rapid building of the 1980s, paced the economic recession, before rebounding throughout the mid-and late 1990s.

Current Conditions

Perhaps the most significant, and certainly the most welcome, development in the asphalt industry in the late 1990s was the passage of the Transportation Efficiency Act for the 21st Century (TEA-21). This legislation, authorizing a host of construction projects and funding, promises to be a boon to highway construction and, thus, to asphalt companies. The Act paves the way for the repair of more than 20,000 lane miles of highways in the United States, along with the construction of 3,000 miles of new road construction. The Act also provides more hands-on aid to the industry as well, in the form of the Institute of Safe, Quiet, and Durable Highways at Purdue University. The Institute, funded in part by TEA-21, was created to study the interaction of tire design and highway surfaces with an eye toward increasing the comfort and durability of the nation's highways. Of concern to manufacturers of asphalt paving mixtures and blocks are the efforts to isolate the proper mixture of asphalt conducive to limiting sound radiation caused by the interaction of road surfaces with tires. Examinations have been underway on porous asphalt and rubber-modified asphalt.

The federal Superpave program, a performance-based specification system developed by the Strategic Highway Research Program (SHRP) to improve national road durability, has gained a dramatic foothold nationwide. Superpave involves a volumetric mix design aimed at resisting wear and cracking due to low temperatures and a liquid-binder specification. In the late 1990s, one-third of all hot-mix asphalt projects were Superpave. Almost all states had implemented Superpave binder specifications by 2000, and 39 states had adopted its volumetric mix-design procedures.

An increasing number of states are beginning to lean toward rubberized asphalt, a surface that incorporates crumb rubber into its aggregate mix, for new highway projects. Rubberized asphalt was first developed in the late 1960s and began to be used widely in the early 1990s. By 2000, rubberized asphalt was used in 40 states.

Relatedly, the asphalt industry was increasingly attracted to the use of recycled materials in mix designs. Rubberized asphalt, in particular, was especially noteworthy for its incorporation of scrap tires in its mix design—a practice that analysts held could reduce the nation's tire stockpiles significantly with only minimal application. The processing of recycled aggregate was becoming a major business in its own right in 2000, and companies were increasingly incorporating this practice into their production. About 67 million tons of construction aggregate were recycled in the late 1990s, up from 54.6 million tons earlier in the decade. The increase in waste-disposal costs and, relatedly, heightened environmental concerns relating to aggregate production and general waste has furthered the trend toward the use of recycled materials, even including old computers and electronic equipment, in asphalt paving mixtures. Asphalt companies trying to trim costs are finding the recycled aggregate sector an attractive niche.

Despite these positive developments, the industry was still facing challenges from environmentalists, many of whom have filed suit against companies, alleging violations of standards enacted by the Clean Air Act of 1990. More generally, the increase in highway construction has pushed the issue of urban sprawl into the political arena, which could make the prospects for asphalt paving mixtures and blocks in some urban and suburban markets more murky than the broader industry's trends would suggest.

Industry Leaders

The asphalt industry is highly fragmented, with companies ranging from small firms engaged only in mixtures to large construction firms involved in highway paving and other construction.

Vulcan Materials Company, with 6,970 employees, was the largest U.S. producer of construction aggregates in 1999, having manufactured 10 million tons of asphalt products. Vulcan was able to generate 10 percent annual sales growth throughout the mid-and late 1990s. In 1998, the firm acquired industry leader CalMat Company, leading to 1999 sales of $2.19 billion, of which Construction Materials accounted for 70 percent.

Martin Marietta Materials, another major industry player, went on a spending spree in 1999, acquiring nine companies and boosting sales to $1.2 billion, a 20 percent increase over 1998. The firm maintained a payroll of 5,700 employees.

Workforce

The asphalt paving mixture industry employed just under 13,000 workers in 2000, of which production workers, earning an average wage of $17.11 per hour, significantly above the average for manufacturing sectors, numbered roughly 9,800.

A concern to the asphalt industry, revealed in 1992 by the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA), was that 500,000 workers were potentially exposed to asphalt fumes that could cause headache, skin rash, fatigue, reduced appetite, throat and eye irritation, and cough. OSHA was developing an action plan to reduce exposures to this hazard but had not initiated any further action.

Research and Technology

Among the most prominent technological breakthroughs in the industry in the 1990s was stone mastic asphalt (SMA). Developed in Europe, SMA incorporates cellulose fibers that make it stronger than conventional asphalt. Efforts to use recycled rubber tires as an asphalt ingredient were encouraged by 1991's Intermodal Surface Transportation Efficiency Act (ISTEA), which mandated the use of scrap tires in federally funded state roads.

Further Reading

Defendis, Megan. "Deal to Turn Tires Into Asphalt Blend." Waste News, 2 March 1998.

Halal, Anne Marie. "Hot Mix." Waste News, 11 August 1997.

Kett, Irving. Asphalt Materials and Mix Design Manual, New Jersey: Noyes Publications, 1998.

Moore, Miles. "Institute to Research Tire, Highway Noise." Rubber & Plastics News, 20 September 1999.

Nichol, Kyle. "Is Recycling the Waste To Go?" Pit & Quarry, May 1997.

"Superpave Projects Increase Fourfold." Pit & Quarry, August 1998.

Usmani, Arthur M. Asphalt Science and Technology. Monticello, NY: Marcel Dekker, 1997.

United States Census Bureau. 1997 Census of Manufacturers. Washington, D.C.: Department of Commerce, 1999.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .



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