Rock Products

JAN 2018

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www.rockproducts.com ROCK products • January 2018 • 21 surge in public educational construction," said Ken Simon- son, the Associated General Contractors of America's chief economist. "But for the first 10 months of 2017 combined, public investment – specifically in infrastructure – has fallen short of the already inadequate amounts posted in the same period of 2016." In contrast to the increase between September and October, public construction spending year-to-date shrank 3.4 percent from January through October combined, compared with the same months of 2016, with year-to-date losses concentrated in infrastructure categories, Simonson noted. Public spend- ing year-to-date on highway and street construction declined 4.3 percent from 2016; spending on transportation (transit, airports, rail and ports) slipped 1.6 percent; investment in sewage and waste disposal tumbled 15.9 percent; and water supply construction dollars plunged 9.6 percent. In contrast to infrastructure spending, which generally depends in part on federal funds, school and university construction – funded largely by local property taxes and tuition, respectively – climbed 2.2 percent from 2016 to 2017. Private construction spending fared better, the economist pointed out. Private residential spending rose 11.2 percent year-to-date, with gains for new single-family construction (9.0 percent), multifamily (3.9 percent) and improvements to existing housing (17.2 percent). Private nonresidential spending year-to-date edged up 1.5 percent. The largest private nonresidential category, power (electric power plus oil and gas field and pipeline construction) declined 2.5 percent year-to-date, while the second-largest segment, commercial (retail, warehouse and farm construction) soared 14.7 percent as warehouse con- struction boomed. Association officials called on federal, state and local offi- cials to boost funding for infrastructure. The officials said that new infrastructure funding is vital for supporting economic growth, as well as public health and safety. "It is essential to increase the nation's investment in roads and other transportation facilities to keep the economy growing," said Stephen E. Sandherr, the Associated General Contractors of America's chief executive officer. "And invest- ment in safer highways, drinking water and wastewater systems are important for public safety and health." Transportation Construction Forecast The U.S. transportation infrastructure market is anticipated to rebound slightly next year, following a 2.8 percent drop in 2017, according to the American Road & Transportation Build- ers Association's (ARTBA) economic forecast released Nov. 30. Total domestic transportation construction and relat- ed-market activity is forecast to reach $255 billion in 2018, a year-on-year increase of 3.2 percent after adjusting for project costs and inflation. The 2017 market performance is expected to come in at $247.1 billion. The 2017 market drop was largely driven by the over- all national decline in state and local highway and bridge spending, which is expected to be down 6.4 percent and 7.7 percent, respectively. ARTBA Chief Economist Dr. Alison Premo Black shared the findings in her multimodal forecast during a webinar for analysts, investors, transportation construction market exec- utives and public officials. Although the overall U.S. transportation infrastructure market will see modest growth in 2018, the situation will likely vary significantly by state and region, according to Black. The market is forecast to grow in 20 states and Wash- ington, D.C., and slow in 23 states, with the remaining seven expected to be relatively flat. "The fundamentals of this market are positive," said Black. "There are a lot of things going on that could help support growth in the coming years, including the local and federal investment part of it. It really depends on where you are working. We are seeing much more variation in the regional, state and even local or urban level. There are states and areas that are showing very strong, significant growth and potential for growth over the next few years." The largest 2018 market growth is anticipated in Califor- nia, Florida, Hawaii, New York, Virginia and Washington, ARTBA said. The association anticipates a slowdown in new work in Arizona, Colorado, Delaware, Maryland, Nevada and Oklahoma. The Minnesota, New Jersey, Ohio, Texas and Iowa markets are anticipated to be steady. Federal highway funding of state DOT programs provided by the 2015 FAST Act will continue to show inflationary growth in 2018, providing a degree of market stability in every state. Black noted that although there have been significant increases in state and local revenues for transportation pur- poses in a number of states over the past several years, some of that revenue is dedicated to debt reduction or has been delayed from reaching the transportation market due to state budget issues. These factors, combined with receding state markets due to completion of bond programs or declining or inflation-eroded

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