Spurred by continued increases in federal funding and renewed economic growth, the U.S. highway construction market should grow 4.2 percent in 2004, the chief economist of the Washington D.C.-based American Road & Transportation Builders Association (ARTBA) said.
William Buechner, ARTBA vice president of economics and research, said the expected congressional approval of $33.6 billion in federal highway investment for fiscal year 2004 –– an increase of $2 billion over fiscal year 2003 levels –– will drive the market growth.
The value of construction work performed on highway and bridge projects is projected to be a record $62.5 billion in 2004, up from $60 billion in 2003, according to ARTBA.
Buechner, who served the U.S. Congress Joint Economic Committee for nearly two decades before joining ARTBA, said recent strengthening of the American economy will also be a contributing factor to the growth.
The nation’s gross domestic product increased at an 8.2 percent annual rate in the third quarter of 2003. Economists expect the economy to grow 3.9 percent in 2004 to move above 4 percent per year the following year. Renewed economic growth should ease the dire state and local budget situation and permit renewed growth of investment in highways and bridges, Buechner said.
The ARTBA forecast also looks at the growth of the highway construction market over the next six years under several legislative proposals being considered as part of the reauthorization of TEA-21, which Congress is expected to debate early this year.
If Congress adopts the $375 billion House Transportation & Infrastructure Committee bill and state and local highway funding grows with the economy, there would be an average 7 percent annual growth in the highway construction market over the next six years. The $311 billion Senate Environmental & Public Works Committee bill would generate 4.8 percent annual growth, according to Buechner.
Outlook for Public Transit & Airports
Transit and light rail construction grew sharply in 2001 and 2002 but eased off slightly in 2003. For fiscal year 2004, Congress is expected to enact a small increase in federal transit investment –– from $7.2 billion in fiscal year 2003 to $7.3 billion. This will likely help maintain the high levels of construction activity of the past few years.
Construction work performed on airport runways, taxiways and related projects was down in 2003, partly because of the diversion of more than $500 million of federal airport construction funds to airport security in fiscal years 2002 and 2003. Legislation to discourage this diversion has been enacted. Congress approved $3.4 billion in fiscal year 2004 for airport construction –– the same level as 2003. Eliminating the diversion construction funds to airport security programs, however, should help foster modest growth in the airport construction market in 2004, Buechner said.
For more information, visit www.artba.org.