The crisis facing the federal highway program will send shock waves through the construction equipment industry, Associated Equipment Distributors (AED) Vice Chairman Tim Watters said today.
Federal surface transportation programs are facing an unprecedented crisis. According to data released this week by the Congress Budget Office (CBO), in FY 2015, the Highway Trust Fund (HTF) will be unable to support any highway or transit spending, jeopardizing more than $50 billion in annual investment.
The potential loss of almost $36 billion in core annual highway investment alone would take an enormous toll on the equipment industry. Each dollar in highway spending generates 6.4 cents in equipment market activity (sales, rental, and product support) and dealerships average $606,000 in sales per employee. AED estimates the HTF "year zero" scenario will cost the equipment industry $2.3 billion in lost market activity and threaten more than 3,700 dealership jobs.
"For me, those numbers aren't abstract, they're terrifying," said Watters, who is the president & CEO of Hoffman Equipment in Piscataway, NJ. "Those are my employees, my coworkers, my colleagues, and my friends, and they could very well find themselves out of work if Congress doesn't get its act together and solve this problem."
Watters was speaking at a press conference organized by Senate Environment & Public Works Committee Chairman Barbara Boxer (D-Calif.) to draw attention to the highway funding crisis. Watters said AED would stand with Chairman Boxer as she works with her House and Senate colleagues to put the HTF back on solid fiscal footing.
"This isn't a Democratic or Republican issue. This is a jobs issue," Watters said. "This is a battle for the health of the construction equipment industry and, more broadly, the future of the U.S. economy."
AED's projection of the state-by-state equipment market and jobs impact of looming highway funding cuts is available here.