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Highways on the Hot Seat

RR080119 workerAugust 1, 2019– According to the latest construction spending report from the U.S. Census Bureau, highway construction in June was at a seasonally adjusted annual rate of $101.9 billion, 6.4% (±5.4%) below the revised May estimate of $108.9 billion. But spending in the first half of 2019 was up sharply for most public infrastructure, with year-to-date increases of 14.5% for highway and street construction spending, 7.1% for transportation (airports, transit, rail and port) spending, 16.2% for sewage and waste disposal, 15.1% for water supply and 12.2% for conservation and development. Associated Builders and Contractors Chief Economist Anirban Basu cautioned, "The U.S. construction industry’s most significant source of uncertainty may be the pending insolvency of the Highway Trust Fund. That insolvency is now a mere two years away, and if policymakers fail to act expeditiously, state and local policymakers may choose to postpone certain projects given the rising uncertainty of federal funding. The highway/street and transportation categories are especially vulnerable to such dynamics.”

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Martin Marietta: Inside the Report

RR043019 MartinMariettalogoJuly 30, 2019 – Martin Marietta Materials just reported record second-quarter profit of $189.5 million on revenue of $1.28 billion. In its quarterly report, the company looked ahead, stating, "Infrastructure construction, particularly for aggregates-intensive highways and streets, should benefit from recent accelerations in state lettings and contract awards in key Martin Marietta states, continued FAST Act funding, and regulatory reform that allows for reduced permitting time for large projects. Importantly, states will continue to play an expanded role in infrastructure investment. Incremental funding at the state and local levels, through bond issuances, toll roads and tax initiatives, should grow at faster near-term rates than federal funding. Martin Marietta’s top ten states – Texas, Colorado, North Carolina, Georgia, Iowa, Florida, South Carolina, Indiana, Maryland and Nebraska – accounted for 85% of total Building Materials’ revenues in 2018 and have all introduced incremental transportation funding measures within the last five years. Third-party forecasts also predict increased infrastructure investment this year and beyond."

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New Transportation Bill Falls Short

RR052319 HighwayBillJuly 29, 2019 – A bipartisan group of U.S. senators is going to introduce the $287 billion America’s Transportation Infrastructure Act of 2019. The bill is the largest highway legislation in history. And it is nowhere near enough. Ninety percent of that money would automatically go to states, so every community can have its needs met in red states and blue states alike, the senators say. America's economy relies heavily on the nation's roads and bridges. We need that trillion-dollar bill that has been talked about and not acted upon. I commend the senators for a good start. But again, it's not enough.

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Murray Talks About Construction Market

RR062019 DodgeDataJuly 25, 2019 – Dodge Data and Analytics released its report for June,and thus the first half of the year. “On balance, the pace of construction starts has been sluggish so far in 2019, as activity has been generally lower than the healthy amount reported during the first half of 2018,” stated Robert A. Murray, chief economist for Dodge Data & Analytics. “The improved activity during May and June suggests that the gap relative to last year should narrow in coming months. Murray said that public works construction was generally lackluster. Highway and bridge construction in June retreated 5%, settling back for the second month in a row after improved activity in March and April. Hear Murray discuss construction market conditions here.

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A Hit to American Households

AEMlogo squareJuly 24, 2019 – According to the Association of Equipment Manufacturers, commerce in America suffers as a result of poorly maintained infrastructure, and the costs are often passed down to American consumers. A study the American Society of Civil Engineers suggests that infrastructure deficiencies are estimated to cost American households $3,400 in disposable income this year, and by 2025 will cost the economy $4 trillion in GDP and a loss of 2.5 million jobs. And it isn’t just our roads, bridges and airports that are hurting commerce. Our nation’s waterways and harbors represent some of the most cost-effective, fuel-efficient, and safe modes of freight transport domestically, yet outdated infrastructure threatens to undermine the benefits they provide due to frequent delays and inefficiencies. Too many of our nation’s locks and dams are obsolete, and insufficient maintenance has increased unplanned stoppages by 700% over the last decade. In 2017, a study performed by the Center for Transportation Research at the University of Tennessee concluded that unscheduled, extended outages at just four of the locks that they studied would create billions of dollars of harm to shippers and other areas of the economy that their activity supports. Without increased investment in our waterways, our economy will take a hit. These are real issues that American families and businesses face every day, and our elected officials should tackle them head on with a bold new vision for how to modernize and rebuild our infrastructure.

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