Construction offers opportunity
Jan 1, 2004 12:00 PM, Editorial By Charles E Wilson
IN GENERAL, tank truck companies that haul construction materials — cement, asphalt, and the chemical additives that go into them — should have plenty to do during 2004. That's good news for the tank truck industry because a significant number of fleets are involved in hauling products used in construction.
Construction is one of the factors contributing to the generally positive outlook for US economic growth this year, according to the 2004 construction transportation forecast that starts on page 24 of Modern Bulk Transporter. Highway construction should increase by around 4.2% in 2004; public works projects will rise about 2%; and the hotel and warehouse sectors should see double-digit growth.
While work on airport infrastructure declined in 2003, the situation should improve modestly this year. A big reason for the drop was the diversion of more than $500 million in federal airport construction funds to airport security over the past two years. Newly enacted legislation should help curtail further diversion.
Federal investment in transit infrastructure is expected to increase slightly. This would help maintain the high levels of construction activity seen in recent years related to public transit programs.
The outlook for federally funded construction work could get even rosier, according to projections from the American Road & Transportation Builders Association (ARTBA). If Congress adopts the $375-billion House Transportation & Infrastructure Committee bill, and state and local funding grows with the economy, it's possible that the industry could see an average 7% annual growth in the highway construction market over the next six years. That would be a wonderful development.
With all of the construction projects in the works, the Portland Cement Association calls for US cement consumption of 105.23 million metric tons in 2004, a 0.8% increase over 2003. The association predicts that cement consumption will continue to grow by 2% to 3% annually between 2005 and 2007.
More imported cement will reach the United States over the next few years. Imports are expected to grow by about 3% annually from 2005 to 2007.
Demand for asphalt and asphalt products will grow. In addition to road construction, asphalt is used in shingles and other materials that go to the construction industry.
Not surprisingly, construction industry optimism is on the rise. In fact, construction industry leaders are significantly more positive about the industry's prospects than at any time since 1999, according to an annual forecast on industry attitudes by CIT Equipment Finance.
Tank truck fleets including Reis Trucking Inc (page 12) and Washington Trucking Inc (page 18) also have good reason to be optimistic. While recovery in many parts of the US economy has yet to reach the tank truck industry, fleets involved in construction hauling should see benefits very soon.
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