Industry News

2005 Asphalt Industry News

Expert Expects 4.5% Growth in U.S. Highway Construction Market
ARTBA Economist tells analysts his prediction during London seminar

American Road & Transportation Builders Association (ARTBA) Vice President of Economics and Research William Buechner told European analysts in February that the U.S. highway construction market should grow 4.5 percent in 2005.

Dr. Buechner, a Harvard-trained economist who served the Joint Economic Committee of the U.S. Congress for nearly two decades before joining ARTBA, says the value of construction work performed on highway and bridge projects should be a record $69 billion in FY 2005, up from $66 billion in FY 2004.

Market growth is being spurred by continued increases in federal funding and a stronger American economy, Buechner says. According to ARTBA, several factors should help support market growth in the year ahead:

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 2004 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 approved a record $34.4 billion for federal highway investment in FY 2005. On September 30, 2004, 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 $36.3 billion. The effective year-to-year increase would thus be $4.6 billion, ARTBA says.

A law signed in late 2004 by President Bush reforming the tax treatment for the sale of ethanol motor fuels should also yield an additional $3 billion in Highway Trust Fund revenues annually, Buechner added.

Buechner cautions 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 in 2004, 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 during the year.

The ARTBA economist also says the release of President Bush's FY 2006 budget is another step in the ongoing debate on reauthorization of the Transportation Equity Act for the 21st Century. The House and Senate are expected to introduce their respective surface transportation reauthorization measures after the Administration's budget is released. The level of investment in the final legislation will be a key factor in determining future growth in the U.S. highway construction market, Buechner says.

Transtech wins Contract, opens QCQA lab in New York

The Texas Department of Transportation recently released an Open Market Purchase Order for a quantity of TransTech PQI301 Pavement Quality Indicators.

The award brings non-nuclear measurement of hot mix asphalt mat densities to Texas highways and opens the door for paving contractors, asphalt testing labs and other governmental agencies to follow suit with this state-of-the-art technique.

Unlike the nuclear gauge, which is driven by two radioactive isotopes, the PQI develops an electromagnetic field running at one megahertz, which falls between the AM and FM radio frequencies. Thus it is not only safe to use, but requires none of the licensing and regulatory fees of the nuclear gauge.

The TXDOT contract also allows for a nuclear gauge trade-in allowance on a new PQI. Proper disposal paperwork is also included in the award.

The PQI is covered by AASHTO Specification TP68 and ASTM-D-7113. Either with or without the nuclear gauge trade-in program, the PQI301 is now available to Texas contractors, testing organizations and other jurisdictions.

In other company news, TransTech recently opened the doors of QCQA Laboratories Inc., a full service civil engineering testing facility in Schenectady, NY.

QCQA Labs offers a wide range of construction material testing for projects from highways and airport runways through bridges and tunnels to dams, power plants and other public, commercial and private structures.

QCQA Labs offers numerous testing options for asphalt, concrete, soils and steel as well as various other technical services. According to David Apkarian, TransTech president, "We are looking forward to expanding on the vast knowledge we have gained from the development of testing equipment for these industries and to offering those services, at a very fair price, to state jurisdictions and private organizations in need of them."

A current listing of QCQA's asphalt design, production and asphalt laydown inspection services includes HMA density testing, core sample analysis, perpetual pavement design and mix verifications, segregation testing and a comprehensive NYSDOT quality assurance package plus NYSDOT plant quality control inspection.

BMG Seltec partners with Cognos

BMG Seltec, a provider of electronic control systems and business systems to support the needs of the bulk construction materials industry, is adding Cognos' reporting capabilities to its suite of enterprise management systems tailored specifically for producers of aggregates, asphalt and concrete.

As a recently named Cognos Solution Provider, BMG Seltec will now offer Cognos products, such as Cognos PowerPlay and Cognos Impromptu, through BMG Seltec's direct sales channel. BMG Seltec will also offer industry-specific data mapping and data reporting cubes to complement BMG Seltec applications. These components provide pre-configured reporting for a rapid-start business intelligence solution.

"We're pleased to have an industry-leading vertical solution partner in BMG Seltec," says Rich Luciano, director, Channel Development, Cognos. "Their comprehensive support of Cognos solutions enhances our customers' ability to make informed — rather than assumed —business decisions and predict key data patterns more accurately."

ARTBA gives out awards

Richard R. Stander, Sr., a past chairman of the American Road & Transportation Builders Association (ARTBA) and former president of Mansfield Asphalt Paving Company in Ohio, is the 2004 recipient of the George S. Bartlett Award, which recognizes an individual "who has made an outstanding contribution to highway progress."

Throughout his career, which spans more than a half century, Stander has been an inventor and industry pioneer. In World War II, he championed research that led to a new type of floating bridge to accommodate larger and heavier armored vehicles. After the war, he built the Mansfield Asphalt Paving Company into one of Ohio's leading contractors and was an early adopter of automatic paver screeds, pneumatic and vibratory rollers and state-of-the-art asphalt plant production.

Gene C. Griffin, director of the Upper Great Plains Transportation Institute (UGPTI) at North Dakota State University in Fargo, is the 2004 recipient of the S.S. Steinberg Award, which recognizes an individual who has made remarkable contributions to transportation education.

Griffin has been director of the UGPTI for 25 years. He is responsible for the Institute's eight research programs and the graduate and undergraduate education programs. Under his leadership, the UGPTI has gained national recognition for its research and educational activities on rural and small urban transportation and logistics issues.

Leica announces sweepstakes winner

Leica Geosystems announced the winner of the 2004 System 1200 Sweepstakes, featuring a 2004 Ford F-150 SuperCrew pick-up truck as the grand prize. The winner was Pete Tuftee, computer-aided design technician and crew chief with Welch Hanson Associates of Delafield, WI. The award was presented by Hans Hess, chairman and CEO of Leica Geosystems, and Bob Williams, president of the Surveying and Engineering Division for the Americas.

Komatsu donates to tsunami disaster relief

Komatsu Ltd., the Tokyo, Japan-based parent company of Komatsu America Corp., has announced a pledge of $2 million in aid to assist the victims of the Indian Ocean tsunami disaster including an initial cash donation of about $200,000 to the Japanese Red Cross, along with in-kind contributions of construction equipment. In conjunction with its local subsidiaries and distributors in Southeast Asia, Komatsu is dispatching equipment and operators to assist with recovery efforts. In addition, Komatsu America Corp., a wholly owned subsidiary of Komatsu Ltd., will be making a cash donation to the American Red Cross International Response Fund for tsunami relief efforts.

Quiet pavement website

The Asphalt Pavement Alliance has launched a website devoted specifically to the issue of pavement noise. It's interactive and has all the information you need regarding the issue of pavement-tire-generated noise. Visit to learn more.

From Flexible Pavements of Ohio, January 2005.