Paving the Way for Economic Recovery

By Al Perlman

The United States is embarking on its largest investment in infrastructure since the 1950s, through the impetus of President Obama's $787 billion economic stimulus plan, otherwise known as the American Recovery and Reinvestment Act of 2009.

Nearly $90 billion of the stimulus plan is targeted directly at infrastructure investment: Of that, nearly $48 billion is aimed at transportation infrastructure, including $29 million to build and rebuild our nation's highways and bridges.

This massive infusion of dollars into infrastructure is designed to create jobs, reduce energy consumption and improve our overall quality of life. Clearly, infrastructure investment is a critical component in our nation's road to economic recovery.

And, if it is to be successful, this road to economic recovery will be like so many of the other roads across America: It will be paved in concrete.

Concrete, of course, has long been the foundation -- literally and figuratively -- for America's construction industry. However, changing market dynamics are expected to demand an even greater role for concrete in this next round of infrastructure investment. These new dynamics include:

• A paradigm shift in the cost benefits of utilizing concrete, particularly versus asphalt in the construction of new roads. The cost of building roads with concrete is much less over the long term compared to asphalt, and recently has become about the same over the short term. This is a major development that is expected to have significant impact on the choice of building materials by state and local officials. In addition to being less expensive, concrete roads are more energy efficient than asphalt roads, plus they last longer and require less ongoing maintenance.
• The growing national emphasis on energy independence and environmental responsibility. New and more efficient roads mean less congestion, greater fuel efficiency and a reduction in carbon dioxide emissions. Beyond that, the cement industry has invested heavily in new technologies and equipment to improve energy efficiency at its manufacturing facilities.
• The emphasis on infrastructure investment to create jobs. For every $1 million the nation spends on infrastructure we create approximately 15 jobs. So the planned $87 billion infrastructure investment could create more than 1.3 million jobs directly. Beyond that, each construction job creates another 1.7 related jobs by infusing money into the economy, so the overall number of jobs created from the planned infrastructure investment could approach 4 million total.

Paving's New Reality
The commitment to invest significantly in the nation's infrastructure comes at a time when engineers, builders and planners are rethinking their criteria for selecting building materials, particularly for road construction. It used to be that asphalt was often "rubber stamped" as the material of choice because it was less expensive than concrete as an initial expenditure.

However, in the past five years the prices of asphalt have increased dramatically -- to the point where the construction of asphalt roads no longer provides any short-term cost benefits versus concrete roads. Since concrete roads are more energy efficient, more durable and require much less ongoing maintenance, state Department of Transportation officials are now turning more often to concrete as their solution of choice.

This is particularly critical in today's environment, as dollars are being allocated for new projects, because, in addition to rising prices of asphalt, there have also been product shortages during the past few years, which are expected to continue unto the future. These shortages are the result of greater efficiencies in the oil industry at producing gasoline as opposed to the waste material that is used in asphalt.