Today in a conference call focusing on the 2015 economic outlook for the asphalt industry, Jay Hansen, executive vice president for the National Asphalt Pavement Association (NAPA), predicted that a fix for highway funding will not happen until the second half of this year.
Hansen said the case for increased infrastructure spending is definitely on the radar of both President Obama and the leadership in Congress. He pointed to a letter sent last week to Congressional leaders and signed by 285 members that shows widespread support for fixing the Highway Trust Fund and quick action on a long-term surface transportation bill. "The will to do it is there," he said. "But the 'how' is silent.
"We need a multiyear fix to the HTF (highway trust fund) with increased highway funding," continued Hansen. "But when the current highway bill (MAP-21) expires at the end of May, we will probably get an extension. Our fix will come in the second half of the year."
On the economic outlook for the asphalt industry, Hansen had positive predictions.
The amount of asphalt tons produced since 2008 has been on a downward slide, but he noted a slight 3% increase at the end of 2014 that pointed to a sign of "things to come."
"Because some states have increased highway revenues, we'll see that this season with an increase in the amount of asphalt produced," he said.
Hansen also predicted that there will be a 1% to 5% increase in the overall infrastructure market. He sees the commercial construction market picking up steam, and the government/institutional market will increase 6% to 9%.
Residential construction is the one to watch, said Hansen. "Coming off a disappointing year with low levels of construction, we're seeing an increase in this market of 10% or greater," he said.
All told, Hansen predicts a 5% increase in total tons of asphalt produced to 356 million tons in 2015.
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