Industry News

ARTBA forecasts growth ... but cautions higher costs could absorb gain

Spurred by continued increases in federal funding and renewed economic growth, the U.S. highway construction market should grow 4.5 percent in 2005, according to the chief economist for the American Road & Transportation Builders Association (ARTBA). The real question, however, ARTBA Vice President of Economics & Research William Buechner says, is how much of the growth will be absorbed by rising construction costs.

The value of construction work performed on highway and bridge projects should be $69 billion in FY 2005, up from $66 billion in FY 2004, according to ARTBA.

Dr. Buechner, a Harvard-trained economist who served the Joint Economic Committee of the U.S. Congress for nearly two decades before joining ARTBA, released his report Nov. 10 at a seminar in New York City for Wall Street analysts. He says several factors should help support market growth next year:

State and local budgets are improving. General state tax revenues are rebounding. Economic growth is the best indicator of state and local funding for highway and bridge construction, Buechner says. The Bush Administration's August budget update predicts the economy will grow about 5.5 percent annually in current dollars between now and 2009. That should provide a solid base for more state and local government investment in highway construction in 2005 and beyond.

State and local DOTs will have more federal highway aid available in FY 2005 than FY 2004. Congress has signaled its intention to appropriate $34.6 billion for federal highway investment in FY 2005. On September 30, Congress also voted to shift $1.9 billion of FY 2004 highway funding into FY 2005. The result was to reduce FY 2004 funding of $33.6 billion to $31.7 billion and increase FY 2005 to $36.5 billion. The effective year-to-year increase would thus be $4.8 billion, ARTBA says.

TEA-21 — the law that funds highway and transit programs — was extended eight months through May 31, 2005, and should give state and local DOTs more predictability and firmer footing for highway design and letting programs in 2005, according to Buechner. A new law reforming the tax treatment for the sale of ethanol motor fuels should also yield an additional $4 billion in Highway Trust Fund revenues annually.

Buechner cautioned higher construction costs caused by dramatic increases in steel, cement and petroleum prices could impact the overall level of growth in 2005. The factors that generated strong cost increases this year, such as the weakening dollar and growing demand for construction materials in China, were unanticipated and are likely here to stay. If steel, cement and other materials stabilize at their current levels, the cost of highway construction in 2005 would be about two percent higher than in 2004, which Buechner says, would absorb about half of the investment increase. If prices continue to rise at their current rate, they will likely consume most of the projected increase in the value of highway construction market next year.

ISEA updates standard for safety apparel

An updated American Naitonal Standard for high-visibility safety apparel now is available from ISEA (International Safety Equipment Association). The American National Standard for High Visibility Safety Products and Headwear is the authoritative guide for the design, performance specifications and use of high-visibility apparel, including vest, jackets, bib/jumpsuit coveralls, trousers, hats and fall-protection harnesses.

For more information or to order a copy of the standard, contact Cristine Fargo at cfargo@safetyequipment.org.

Case awarded military contracts

Case Construction Equipment, a brand of CNH, has been awarded its second U.S. military contract this year. It has been contracted by TACOM (Tank, Automotive and Armaments Command) to refurbish close to 100 MW24C wheel loaders for the Army. The goal of the program is to repair the machines on a quick-turn basis for deployment to Southwest Asia. Case was previously contracted to remanufacture MW24C wheel loaders for the U.S. Army National Guard.

Volvo awarded Iraqi contracts

Volvo Construction Equipment North America has been awarded contracts totaling approximately $30 million by the U.S. government to build and deliver more than 200 units of construction equipment to the Iraqi government to be used in reconstruction of that country. The contracts call for the delivery to Iraq of 120 L120E wheel loaders, 28 EW180B wheeled excavators, 50 G710B motor graders and 10 BL70 backhoe-loaders over a two-year period.

E-news

Eagle Crusher Company launches its new website at www.eagle-crusher.com. The site has undergone a complete transformation, including new site navigation. Changes to the site include a dealer page that allows customers to locate dealers by state. In addition, each equipment page, sorted by recycling and aggregate sections, features useful plant specifications and colorful application photos. Equipment specification sheets are also available on the site, downloadable in a PDF format.

Superior Industries' new multi-media website at www.superior-ind.com allows quick, easy access to the most complete information regarding conveyor systems and components. Producers can learn about the latest material handling technology by downloading from an extensive list of product brochures, catalogs, case studies, press releases, technical papers and service manuals. The website offers interactive features that include online conveyor troubleshooting. Plus, the specification software applications of ConveyBuilder and IdlerSelector allow a fast, simple yet accurate way to specify the ideal conveyor system and idlers for a given application.

Did you know ...
Recognizing the signs of cold stress

Prolonged exposure to freezing or cold temperatures might cause serious health problems, such as trench foot, frostbite and hypothermia. In extreme cases, including cold-water immersion, exposure can lead to death. Danger signs include uncontrolled shivering, slurred speech, clumsy movements, fatigue and confused behavior. If these signs are observed, call for emergency help.

The U.S. Occupational Safety and Health Administration Cold Stress Card provides a reference guide and recommendations to combat and prevent many illnesses and injuries. Free laminated copies are available by calling 800-321-OSHA.

Information provided by ISEA, Protection Update, Winter 2004.

Free guide for aggregate, asphalt producers

BMG Seltec is offering the new guide, Information and Automation Systems for Aggregate and Asphalt Producers.

This free resource guide details BMG Seltec's capabilities and complete family of products and services, including aggregate site automation systems, advanced solutions for asphalt producers, and information systems specifically designed to satisfy the unique operating requirements of asphalt and aggregate producers.

BMG Seltec is a provider of site automation controls, point-of-sale ticketing systems, and operations software all tailored exclusively for producers of aggregates and asphalt.

For more information contact BMG Seltec by calling (925) 373-3200 or visiting www.bmgseltec.com

Voters support transportation funding

Most voters asked at the ballot box November 2 whether they would support increasing their tax burden to fund transportation improvements said "yes." In total, the revenue measures would generate at least $28 billion in new revenue for transportation infrastructure work, an American Road & Transportation Builders Association (ARTBA) review finds.

Of the 55 transportation funding-related ballot initiatives in 21 states, 46 —more than 80 percent — asked voters to initiate, extend or increase taxes to fund transportation improvements. Thirty-six — 78 percent of the bond and tax measures — were approved.

This included all 12 bond measures proposed to raise capital for transportation projects. Voters in eight states approved 10 of 17 ballot measures that will levy a new tax dedicated to transportation programs. Approval to increase existing transportation-related taxes was given in five of seven ballot measures. Nine of 10 measures to increase existing transportation funding mechanisms were also approved.

And large majorities in two states — Missouri and California — told the state government to stop using highway user revenue to fund non-transportation programs or services, the association says.

A summary of these and other transportation measures decided November 2 can be accessed online at www.artba.org.

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