The Building Tradesman Newspaper

Friday, December 24, 2010

Transportation group forecasts a 4.4% drop in U.S. 2011 highway & bridge construction

By The Building Tradesman

WASHINGTON, D.C. – Continuing budget challenges for state and local governments, uncertainty surrounding a new long-term federal surface transportation bill, and winding down of infrastructure investment under the stimulus law will drive a 4.4 percent contraction in the U.S. highway and bridge construction market in 2011.

That is the central finding in the annual forecast released Dec. 6 from American Road & Transportation Builders Association’s (ARTBA) Vice President Alison Premo Black. The real value of highway, street and bridge construction is expected to fall to $78.5 billion, compared to 2010’s estimated $82.2 billion level, according to Black.

The only positive note: the amount of work completed on bridges is expected to increase to $25.4 billion in 2010, Black says. The value of real work in the bridge market has nearly doubled in the last decade as state and local governments have increasingly addressed long-deteriorating conditions.

Michigan’s road funding plan is a disaster in waiting. While our state spent $1.4 billion in road repairs in 2010, it had to borrow money to get federal matching dollars in order to maintain the 2011 budget at a similar level. But then comes the free-fall: the Michigan Department of Transportation’s predicted total highway repair spending of $3.1 billion from 2012 through 2015 shows a $700 million per year decrease in outlays each year. That level of funding, MDOT said in an understatement, “falls short of delivering many of the identified transportation needs across all modes.”

Black said that the federal stimulus, known as the American Recovery & Reinvestment Act (ARRA), had positive impacts on the market in 2010. According to Oct. 31 Federal Highway Administration data, the value of ARRA-related transportation projects under construction was $18 billion. Nearly $16 billion has been paid out for construction work performed.