Covid's impact on Indiana's limestone industry

What will the coronavirus do to the way America uses Indiana limestone?

As with all industries in the Hoosier state, Covid-19 has been disruptive to the Indiana limestone industry.  However, unlike some industries such as hospitality and sports that saw an immediate shutdown, the stone industry will face greater challenges over the next year or two as building projects potentially dry up. 

WF Meyers is a family-owned business that has been manufacturing diamond tools for the Indiana limestone industry since 1888.  I have been at the company since 2011, and took over the role of President in 2013.  After the recession began in 2008, WF Meyers’ low point for sales was in 2010.  I am anticipating a similar timeline here as companies complete jobs that were already planned, but new building contracts become scarce.

Indiana limestone is the nation’s premier building stone, and has been used in a number of prominent buildings – from the Empire State Building, to the Pentagon, to state capitol buildings and universities all over the United States.  Indiana limestone continues to be highly sought after for use in government buildings, universities, office buildings, and high-end residential buildings.

Since the limestone industry is so heavily tied to the building sector, Governor Holcomb deemed companies in this space to be essential businesses.  While other industries were paused, we continued to work.  Businesses in this industry have taken the necessary precautions to remain as safe as we can while continuing to work.  

Covid-19 has forced everyone to re-think how we work, live, and learn.  Many people are pondering how these things may change permanently even after the pandemic is reigned in.  Companies that had been resistant to work from home have been forced to send their employees home, and have still managed to remain competitive.  While many colleges and universities are attempting to open, many have moved to online learning, or at the very least implemented a contingency plan for it.

Uncertainty surrounding the future need for office or campus buildings is a long-term concern for the limestone industry.  Indiana limestone’s aesthetic, prestige, and longevity will always make it a premier building material.  However, the market for this material may change.  If remote learning leads to a drop in higher education enrollment, will universities have the funds or need for new buildings?  If office workers transition to remote work full time, will we need as many new office buildings?

On the other hand, if people are spending more time at home, and homes become the new classrooms and office buildings, then people may be more likely to spend money on new home construction or renovations.  The Dow Jones US Select Home Construction Index has climbed to 10,108.99 as of August 21, 2020, compared to a pre-pandemic high water mark of 8,995.76 on February 20, 2020.  This indicates that companies in the home construction sector are performing quite well, despite the virus.  With vacations, sporting events, and other avenues for discretionary spending put on hold, consumers seem to be spending more on their homes.  

Some companies in the limestone industry may want to consider pivoting away from university and government building projects, and do more work on the residential side to remain viable and find a niche in the market. 

But there’s also the possibility of legislation and stimulus spending to fund government and public university projects.  For example, the Indiana University Board of Trustees has approved 5 capital projects for 2021-2023 totaling $405M.  While substantial action out of Washington, D.C. seems to be slow in the run-up to the presidential election, it is not unreasonable to think that a stimulus spending package could be rolled out under either potential administration if the economic effects of Covid-19 persist into the fall and winter.

The limestone industry in Indiana faces an uncertain future, much like many industries throughout the country.  Certainly, there will be lasting changes due to Covid-19, but what will they be?  Similarly to the financial crisis of 2008 or the aftermath of 9/11, there will be changes that come from this disruption to the status quo and many will be unexpected.  In the middle of this pandemic, it is difficult to see which changes will be temporary and which will have staying power after it is under control.  This is an important question for the Indiana limestone industry to ponder as we chart a path forward.

Alex Barnes is CEO of Bedford, Indiana’s WF Meyers and a 2020-2021 MDLF Fellow.