McGraw-Hill Construction data showed that U.S. non-residential building in January 2010 was 21 percent below January 2009. Non-structure construction started this January was another 8 percent behind January 2009. Despite that overall decline, highway construction in 2009 increased 5 percent, supported by stimulus spending. Without the stimulus funds, highway construction spending would have been down 15 percent in 2009. (Engineering News-Record, 3/22/10)
Because of budget constraints, state and local governments are cutting back on road construction. As an example, Colorado Springs, the second-largest city in Colorado, has announced that it will not pay for any street paving, relying instead on a regional authority, which has said it can meet only about 10 percent of the need. In a similar vein, communities in various states (e.g., Maine, Michigan, Indiana, Pennsylvania, Vermont, etc.) have announced plans to convert paved roads back to gravel in order to save on maintenance costs. In hard hit Michigan, 38 counties converted 100 miles of roads since last year because of insufficient funds. If there is not another federal stimulus bill that contributes to state and local highway funds, tire, shock and suspension companies should do quite well, as potholes ravage cars.
Charles Hess
