CMRA MEETING: Flat Highway Ahead

Highway spending is not likely to increase in 2003, according to a forecast from David Czechowski of the Portland Cement Association (PCA), Skokie, Ill. Czechowski gave his forecast to attendees of the C&D World conference in Fort Lauderdale, Fla., on Monday, Jan. 20.

“The sky is not falling; we just need to be prepared for this pause,” Czechowski commented to C&D World attendees regarding a projected highway spending decrease of 0.2 percent in 2003.

Even if Congress approves a generous TEA-21 spending package, “some states may not be ready to pony up their share in 2003,” the PCA economist remarked. Czechowski noted that most states are facing budget deficits, with severe cutbacks expected in several states.

Czechowski’s longer range forecasts have highway spending moving forward again in 2004, increasing by 5.7 percent in that year and by another 5.4 percent in 2005.

Several other construction segments are also expected to show slow or no growth in 2003. Residential construction growth has settled into a narrow annual growth range, according to the PCA’s forecasts. A 2.5 percent growth rate in 2002 will be followed by a flatter decline this year and 0.6 percent growth in 2004. Construction in the industrial and office segments has slowed noticeably.

Overall construction spending decreased by 1.3 percent in 2002 and is expected to fall another 1.5 percent in 2003, said Czechowski. A rebound is forecast for 2004, when overall spending is being forecast to grow by 2.3 percent.

The current lags on the economy include heavy loads of consumer debt, concern over lost portfolio values after the stock market spiral and the uncertain situation with Iraq. On the positive side, interest rates remain low and Americans continue to build and buy new homes and the durable goods that go into them. “The overall picture is fairly moderate,” said Czechowski. “The recession we had in 2001 was fairly moderate by historical standards.”

The C&D World conference, sponsored by the Construction Materials Recycling Association (CMRA), took place in Fort Lauderdale, Fla., Jan. 19-22.