Jule Smith: Thank you, Andy.
Operator: Thank you. Our next questions come from the line of Adam Thalhimer with Thompson Davis. Please proceed with your questions. Q – Adam Thalhimer Hi. Good morning, guys. Nice quarter.
Jule Smith: Hi, Adam.
Adam Thalhimer: What kind of trends are you seeing in the private construction in your markets?
Jule Smith: Adam, as I indicated, we’re still seeing it pretty strong in the Southeast. We haven’t seen a lot of change there. We anticipate it may come. We’re seeing a lot of bidding opportunities. I think residential is — we’re anticipating it slowing down, but there’s a lot of opportunities in commercial and industrial on the private sector. And as we’ve said several times, with the public funding that’s there if the private economy slows down significantly, our backlog is going to give us almost a year window to see it, and we’ll just simply deploy those resources and assets to work on public funded jobs. But we really haven’t seen a really big falloff in bidding opportunities on the private side yet.
Ned Fleming: Adam, this is Ned. The demographic trends for our part of the country are actually getting stronger. More people are moving into the Southeast. They are still struggling to find homes. We don’t anticipate that changing.
Adam Thalhimer: Okay. And then maybe it’s hard to make a broad comment on this, but how would you characterize competitor behavior right now?
Jule Smith: Well, obviously, we see it every week as we’re bidding projects. I would say, Adam, the fact that we’re adding to backlog as strong as we are, we’re getting pricing up in our backlog. That’s continuing to happen. That tells me that our competitors also have healthy backlogs. Our competitors also have gotten more efficient at passing through inflation in their bids. So I feel like that it’s a good environment, it’s a good strong demand environment. And I think our competitors are taking advantage of that as well.
Ned Fleming: And we’re in 60-plus different markets, right? So each market is a little different, and we pay attention, as Alan has said before, to every single market and growing relative market share in all markets. So it’s hard sometimes those questions get asked to be — to generalize it, but recognize we pay attention to every single market.
Adam Thalhimer: All right. And then just lastly, thoughts on your — on the public side, thoughts on your top five, I guess, now six states. What do the budgets look like for next year?
Jule Smith: Adam, the budgets are pretty healthy in all the states. They’re not all equal, but they’re pretty healthy. And each state is getting that IIJA funding. And one thing to remember with that, while some of the funding comes from grants and that’s sporadic and project based in each state, most of the funding from the IIJA comes from the formula. That’s always been used by the federal government for their surface transportation. So it comes to the states by formula, it has to be used and allocated in that federal fiscal year. So they can’t hoard it or save it for some big project at the end. And that helps us because it gives us a good steady demand for work. They deployed on maintenance projects, which are our bread and butter.
One thing that I would say indicates good healthy state budgets. If you look in the states that don’t use their funding, it gets reallocated to other states. And I’ve noticed just last week, of the top 10 states in the nation for receiving reallocated funds, three out of the top 10 are our states of North Carolina, South Carolina and Florida. So that tells me that they’ve got healthy budgets. They’re able to use their dollars and match additional dollars coming to their states.
Adam Thalhimer: Great. Okay. Thanks guys.
Operator: Thank you. Our next questions come from the line of Michael Feniger with Bank of America. Please proceed with your questions.
