Aggregates Manager Digital Magazine
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SPECIAL REPORT Economic Outlook: Modest Growth With a 'Wild Card' T Modest growth is expected in the U.S. transportation construction market, but uncertainty from the 'fiscal cliff' and the 33-month delay in passing MAP-21 will be felt in 2013. A special report based on the American Road and Transportation Builder's economic forecast. by Tina Grady Barbaccia, News and Digital Editor 27A he U.S. transportation construction infrastructure market is expected to show modest growth in 2013, increasing 3 percent from $126.5 billion to $130.3 billion, according to the American Road and Transportation Builders Association's (ARTBA) annual forecast. The association's chief economist, Dr. Alison Premo Black, released her findings during a Nov. 30 webinar for Wall Street analysts and construction industry executives. Growth is expected in highway and street pavements, private work for driveways and parking lots, airport terminal and runway work, railroads, and port and waterway construction. According to the forecast, ARTBA also predicts the bridge market — which the association says has shown substantial growth throughout the last 10 years — to remain flat next year. The federal surface transportation program, combined with state and local government transportation investments, are the most significant drivers of the national transportation infrastructure construction market. The new surface transportation law, "Moving Ahead for Progress in the 21st Century (MAP-21)," passed in July 2012, was a "solution — a two-year patch," says Black, for the 1,000+ days of short-term extensions from the previous transportation law — Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) — which expired Sept. 30, 2009. The dilemma was that Highway Trust Fund (HTF) revenues were inadequate to "preserve the current investment," Black says. Not just another extension However, it's important to note that MAP-21 is not "just another extension," Black points out. The $106 billion, two-year bill has been scoffed at by transportation industry pundits, especially because the legislation was not a multi-year bill at preferred funding levels. The American Association of Safety and Highway Traffic Officials (AASHTO) was calling for a $500 billion funding level. "MAP-21 stabilizes the Highway Trust Fund," Black says, adding that the legislation also had key policy/regulatory reforms. It also garnered broad bipartisan support for transportation. With no new real federal money in the surface transportation law, still-recovering state and local tax collections, and modest new housing starts, the pavement market will be uneven across the nation, Black says. She says pavement work is anticipated to be down in 25 states, and growth above a 5-percent range is expected in 19 states. However, there are at least two developments related to MAP-21 that could lead to additional market activity in the short term and strengthen the market in 2013 and 2014, Black says. First, the law's restructuring of the federal highway program offers state transportation departments more flexibility in their use of federal funds. AGGREGATES MANAGER January 2013 • DIGITAL EXCLUSIVE SpecialReport_AGRM0113.indd 27 1/7/13 8:35 AM