Recovery right on target?

Feb. 18, 2002

Just when you get used to the idea that the U.S. is in a recession, it looks like the recovery might be starting. Scattered reports indicate signs of a light at the end of the economic tunnel.

The Jan. 23 announcement from the Conference Board on its latest forecast stated flatly, “The U.S. economy is moving toward economic recovery, with real gross domestic product rising by a projected 1.3% this year and climbing to 4.2% in 2003.”

Just when you get used to the idea that the U.S. is in a recession, it looks like the recovery might be starting. Scattered reports indicate signs of a light at the end of the economic tunnel.

The Jan. 23 announcement from the Conference Board on its latest forecast stated flatly, “The U.S. economy is moving toward economic recovery, with real gross domestic product rising by a projected 1.3% this year and climbing to 4.2% in 2003.”

The Conference Board made the optimistic forecast, it said, based on a stabilizing job market, strong consumer spending and improving business balance sheets.

“For the time being, the United States has weathered the crisis of Sept. 11,” said Conference Board Chief Economist Gail Fosler, “with relatively minor economic damage in the form of a mild recession which has all the signs of ending very soon.

“This is the first time since the 1970 recession that business productivity has risen in the early stages of a recession, and today’s gains are considerably larger.”

Another encouraging indicator is the fact that producer inventories are low, Ken Simonson, chief economist for the Associated General Contractors of America, reported in his Jan. 22 analysis. He said inventories fell in November as well as the ratio of inventories to sales: “This ratio indicates that manufacturers, wholesalers and retailers have kept inventories in check and will probably increase production as soon as sales turn up.”

A recovery now would be in line with the historical pattern. Since World War II, economic recessions have lasted an average of a little longer than 10 months from the peak of the previous expansion to the trough of the recession, according to a report in The New York Times.

Last November, a group of econom-ics scholars announced that the current recession had started in March 2001. The National Bureau of Economic Research’s business-cycle dating com-mittee pinpointed the start of the downturn long before the terrorist attacks of Sept. 11 or the sharp rise in unemployment. Measured from March 2001, the economy should have started recovering from a 10-month recession in January.

Goldman Sachs and Morgan Stanley are among the other forecasters who think the economic data point to an imminent start to a pickup. Bloomberg News reported in mid-January that U.S. production decreased less in December than in the previous five months, and the Federal Reserve Board sighted scattered signs of improvement around the country.

The ready-mixed concrete industry had a strong year in 2001 even though the economy as a whole did not.

“Probably, we’re going to see a record year for 2001,” Robert Garbini, president of the National Ready Mixed Concrete Association, told Roads & Bridges. “There’s been a steady increase of ready-mix consumption over the last decade that hasn’t really slowed down.”

In 1990, he said, Americans consumed about 0.88 cu yd of concrete per person. In 2001, it was probably 1.5 cu yd per person, or a total of a little more than 400 million cu yd.

Garbini thinks consumption might dip in 2002 back to the level of 2000, or about 394 million cu yd, but no more than that.

President’s report card

Industry officials had good things to say about the performance of President George W. Bush in his first year in office.

“I think he’s done a phenomenal job in a lot of different ways,” Bill Fay, president and CEO of the American Highway Users Alliance, told Roads & Bridges. “The appointment of Mary Peters as the federal highway administrator was extraordinary.”

“I think she’s going to restore the word ‘highway’ to the Federal Highway Administration,” he added, referring to a time in the past when he felt the agency had drifted away from a strict focus on the essentials of asphalt, concrete and steel.

“I think one thing you’re going to see from Administrator Peters is the restoration of a number of positions that had traditionally been filled by engineers and in the Clinton administration were filled by political appointments,” Fay continued. “You had a number of positions where the word ‘engineer’ was eliminated in the title because the people appointed to them were not engineers.

“We’d seen a real deterioration of morale, a deterioration of a sense of mission over the last eight years.”

Fay also had high praise for Bush’s appointment of Norm Mineta as secretary of transportation and Michael Jackson as deputy administrator for transportation.

On the other hand, a July 20, 2001, U.S. DOT statement listing the transportation accomplishments of the Bush administration’s first 180 days said nearly nothing about highways but quite a lot about airlines, energy policy and Coast Guard drug interdiction. The only mention of roadways, as opposed to the vehicles that ride on them, was under the heading “National Energy Policy” and cited the staging of alternative fuel vehicles at the grand re-opening of the I-15 highway in Salt Lake City.

Tunnel guide

A comprehensive guide to tunnel assessment and maintenance is scheduled to be published this summer by the Federal Highway Administration (FHWA) and the Federal Transit Administration.

The guide is the first initiative in the government’s plan to develop a Tunnel Management System (TMS) for the nation’s highway and transit tunnels. There currently is no comprehensive data on the condition of highway tunnels in the U.S. The TMS will be a effort to produce a complete inventory of U.S. highway and transit tunnels, lay out procedures for proper inspection and record keeping and provide guidance for proper maintenance and rehabilitation techniques to help ensure safe and efficient tunnels in the future.

“When we make this tool available to everyone,” Frank Botelho, team leader for management systems in the Office of Asset Management at FHWA, told Roads & Bridges, “those who are not yet doing tunnel management and want to use this as a tool to get started will have the ability to do more comprehensive assessments of condition and then begin to do the analysis of how best to upgrade, repair and maintain these tunnel structures.”

The country’s existing infrastructure includes some 400 highway-related tunnels distributed over 35 states and 655 miles of transit tunnels throughout the country. Tunnel construction in the U.S. has been done in fits and starts. At the turn of the 20th century, the New York and Boston transit systems were constructed. In the 1930s, tunnel ventilation technology was developed. And in the 1960s and 1970s, the interstate highway system was constructed and new transit systems were built in cities like San Francisco, Washington, Atlanta, Dallas and Baltimore.