In an analysis commissioned by the National Stone, Sand & Gravel Association (NSSGA), potential increases in aggregates production are suggested through the five years of the Fixing America’s Surface Transportation (FAST) Act.
“The FAST Act’s five years of funding certainty creates the much-needed stability to enable state governments to plan and implement larger projects again,” said NSSGA President and CEO Michael W. Johnson. “The new highway bill, coupled with an increased demand for all types of construction, will require more raw materials, such as stone, sand and gravel. This is a good sign for the aggregates industry and for America.”
Under a “Steady-State Scenario” in the analysis, the economy, construction spending and aggregates demand continue to grow slowly but steadily at 2 percent per annum throughout the five-year forecast horizon.
The analysis also postulates a more pessimistic “Baseline Scenario,” according to the author, S-C Market Analytics, that is impacted by certain economic factors, resulting in aggregates production gains of 1.1 percent in 2016; 1.4 percent in 2017; 1.9 percent in 2018, then smaller gains of 0.6 percent in 2019 and 0.1 percent in 2020.
“If a slowdown is on the way for 2017 and 2018, the funding certainty of the FAST Act will prove even more meaningful,” Johnson said. “I would hate for the federal highway program to be lurching from short-term extension to short-term extension again during a broad economic downturn.”
He added that the fight over highway funding is not over because Congress failed to include a permanent and growing revenue solution.
“The nation’s infrastructure needs are far greater than the funding provided by the FAST Act. Unless we push Congress to address this shortfall, we will face the same funding cliff that we have had to deal with for the past decade as the program expires in 2020,” Johnson said.