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Congressional Inaction Killing Highway Work


Highway construction work dropped sharply in June, wiping out market gains from the previous seven months amid uncertainty over the federal aid highway program and the Highway Trust Fund, according to the American Road & Transportation Builders Association.

The real value of highway work was $4.2 billion in June 2014, down from $4.7 billion in June 2013, when adjusted for material prices and inflation. This was the first month-to-like-month decline since November 2013 and the largest such decline in the past year.

The decline can be specifically attributed to long-term congressional inaction on deficiencies in the Highway Trust Fund, and Congress’s inability to agree on a new highway bill.

Highway construction had been showing some gains in early 2014, but the recent decline means that contractors have performed $17.8 billion in pavement work through the first half of 2014, compared to $17.4 billion in the first six months of 2013.

The real value of bridge construction was $3 billion in June, increasing by three percent compared to June 2013. The pace of bridge work in 2014 continues at record levels, reaching $13.4 billion in the first six months compared to $12.9 billion during the same time period in 2013.

Year-to-date growth is mostly flat across all other modes. The real value of construction work on railroad projects for January to June 2014 was flat compared to January to June 2013. Airport work was down 5.8 percent, while the real value of construction work for ports and waterways was up 3.7 percent.

“The point here is simple: There are real, substantial costs associated with Congress’s inability to pass a long-term highway bill,” said Michael O’Brien, public affairs manager, Association of Equipment Manufacturers. “Lawmakers’ prolonged struggle to rally even around a short-term patch to the Highway Trust Fund leeched millions from the economy in June, and it’s not as though the measure Congress passed at the end of last month added tremendous certainty to highway construction projects.”

The American Concrete Pavement Association (ACPA) recently called out Congress on its inability to function. Commenting on the recent 10-month patch to the Highway Trust Fund, Gerald F. Voigt, president and chief executive of the association, said, “Although this measure avoids drastic cuts that would have adversely affected our industry, state agencies/owners, and others in the transportation-construction community, we remain very concerned about finding long-term solutions to address the Highway Trust Fund (HTF) issue and the critical needs of our nation’s highways. We urge Congress and the Administration to work on addressing the HTF situation, as well as to support long-term legislation that allows companies to invest in the future and agencies to adequately plan for the current and future needs of our highways.”

Voigt explained that more than a decade’s worth of short-term legislation and temporary fixes to the Highway Trust Fund have impeded the ability of many state agencies and private companies to make capital investments, to plan ahead, and to invest in the technologies necessary to remain competitive in the marketplace.