Rock Products Logo

Stimulus Spending Continues to Slow

According to a recent Portland Cement Association (PCA) Market Intelligence report, 73.1 percent of total American Recovery and Reinvestment Act (ARRA) highway funds have been dispersed through May, compared to 71.3 percent in April.

Although May highway stimulus spending rose 9.7 percent from April levels to $479 million, against year-ago levels, spending volumes declined 49 percent. Spending has averaged $485 million in the last three months compared to a $708 million average for the same period last year. PCA maintains expectations of nearly $9 billion in highway stimulus spending in 2011.

Oklahoma (98.6 percent), South Dakota (98.2 percent) and Wyoming (96.4 percent) have spent the largest share of their allocated funds. Fourteen states have spent more than 90 percent of their funds, compared to seven at the start of the year. Virginia (35.6 percent) has fallen back to last in terms of spent funds as spending accelerated in Hawaii (36.9 percent). The five largest cement consuming states have 36.3 percent of their stimulus funds available – down from 38.4 percent last month.

Presently, 64 percent of ARRA infrastructure projects have been completed with 34 percent underway and 2 percent awaiting notice to proceed. In total, 37 states have completed more than 50 percent of their projects while 12 states have completed 75 percent or more of their planned projects.

Spending in April and May have been below expectations and inconsistent with the previous seasonal cycles. If this weakened trend extends into June, one of the stimulus’s historically strong months, it would suggest increased unspent funds will be carried over into 2012, according to PCA.