Bad news spreads wide. Unfortunately for the road and bridge building industry, one of the worst news stories of 2007 involved a bridge. When the I-35W bridge in Minneapolis collapsed, it dominated the broadcast news. The design of the new bridge to replace it got no attention at all (almost; see Leading them to water: New bridge carrying I-35W will offer more to the community, R&B, November 2007, p 56). When the new Tacoma Narrows Bridge opened, ABC, CBS and NBC barely paid attention.
As for the investigation into what caused the bridge collapse, we are still in the dark. There is speculation, of course, but the National Transportation Safety Board (NTSB) is conducting the investigation and they are not saying much.
All of the major bridge parts have been recovered from the water, Terry Williams, a spokesman for the NTSB, told Roads & Bridges by e-mail. The investigators finished their work at the site in late November.
About 15 investigators are now working at NTSB headquarters to determine the probable cause of the accident.
“As part of its investigation, Safety Board investigators are meeting with persons who were on the bridge at the time of the collapse,” Mark Rosenker, chairman of the NTSB, said in an Oct. 23 update. These survivors were then reviewing a diagram of the I-35W bridge that included vehicles and equipment in probable precollapse locations to refine estimates of the loading of the bridge. Approximately 287 tons of construction materials and equipment were on the bridge at the time of the collapse.
The collapse of a bridge in Point Pleasant, W.Va., 40 years ago spurred the establishment of the National Bridge Inspection Standards (NBIS). The conclusion of the I-35W investigation could produce a substantial course correction in the design, construction and maintenance of bridges in this country.
“Clearly, we need to make improvements to the bridge inspection program,” Ray McCabe, P.E., senior vice president and national director of bridge and tunnel design, HNTB Corp., testified in a hearing before the U.S. House Subcommittee on Highway and Transit on Oct. 23.
McCabe said the NBIS has served the country well, but that its regime of visual inspections leads to subjective determinations of bridge conditions. He cited a Federal Highway Administration study of in-depth inspections, in which “less than 8% of the inspections successfully located weld cracks and other implanted defects in test bridges.”
“Additionally, the emerging field of Structure Health Monitoring holds much promise for real-time evaluation of structures and objective evaluation of bridge conditions,” said McCabe. “Providing more quantitative data to bridge program managers enables them to more accurately rate bridges, which will allow states to effectively allocate bridge rehabilitation dollars.”
The deck truss design of the I-35W bridge is now considered obsolete and is not used anymore, but existing bridges of the same type may need rethinking. Stanley T. Rolfe may have just what the bridge industry needs. Rolfe is a professor of civil, environmental and architectural engineering with the University of Kansas (KU) Fatigue and Fracture Group. Working with the Kansas Department of Transportation, Rolfe and his team of KU engineering faculty have helped safely extend the viability of older bridges that otherwise would have to be replaced with new multimillion-dollar spans.
“I think there needs to be a focus on a cooperative effort to give maintenance of all types of structures a higher priority,” Rolfe told Roads & Bridges. “You wonder what happened in structures that do collapse, because in a general sense they’re well-designed, they’re well-built, and something must have happened.”
Just add water
Growth of 3-4% is what the highway and bridge building industry can expect in 2008, according to the economic forecast of William Buechner, Ph.D., vice president of economics and research at the American Road & Transportation Builders Association (ARTBA). Such growth would put the total work performed at just under $78 billion this year, up from an estimated $75.5 billion in 2007.
The economy as a whole is slowing, but inflation is not, the Conference Board reported.
“The new year is likely to see slow economic growth and perhaps even an uptick in inflation,” the Conference Board said. “That will make it hard to lower interest rates further. . . . The only positive news is that crude oil has backed off from $100/bbl to something closer to $85/bbl. But energy prices have remained high for a long period—long enough to see higher transportation costs begin to send up prices of the goods delivered by truck or rail car.”
The Portland Cement Association (PCA) projects a 7% decline in cement consumption in 2007, a 2.5% decline in 2008 and then a modest recovery in 2009, but only back to 2007 levels.
“It’ll be in 2010 and ’11 when the potential for stronger growth in cement consumption is realized,” Ed Sullivan, chief economist for PCA, said in his economic outlook.
Sullivan pegged the risk of a recession at 40%.
The Conference Board said a recession was unlikely this year, but Ken Simonson, chief economist at the Associated General Contractors of America, sounded more pessimistic.
“A squeeze play” is how Simonson described last year to Roads & Bridges. “We had the compound effect of extreme increases in all of the major component costs that had begun in 2004 with the steel price surge and had also shown up with diesel, asphalt and concrete. In 2007, none of those had a dramatic increase, but they have all gone up since the end of ’03 at much higher rates than the consumer price index. The producer price index for highway construction is now up 49% from December ’03 through November ’07, compared to a 14% increase in the consumer price index.
“The other side of the coin—pun intended—is that the revenue available for highway spending has slowed down dramatically, because the federal and state funds come mainly from fuel taxes and truck taxes, and ever since Hurricane Katrina hit in August of ’05 motorists have been much stingier on their gasoline purchases. Gasoline tax receipts are growing at less than 1% a year, where they used to go up 2 and 3%.”
Gasoline consumption was supposed to rise 1.1% in 2007, according to the Energy Information Administration’s (EIA) projection at the end of 2006. In fact, the EIA had to revise its gas consumption increase down to 0.6% for 2007. The drop is likely to mean a smaller rise in federal and state highway trust fund receipts, Simonson said, because the tax on gas is based on the number of gallons used.
The Office of Management and Budget had to lower its estimate in August of Highway Trust Fund revenue for 2007. Their projection for 2008 is $34.5 billion for the highway fund and $5 billion for mass transit.
Simonson foresees further increases this year in the cost of all major construction materials.
The EIA has estimated that diesel fuel would average $3.21 in 2008, up 11.4% from the agency’s projected 2007 average of $2.88, Simonson reported in his weekly newsletter, The Data DIGest.
The states may be only able to fund about the same amount of road and bridge construction as they did in 2007, said Buechner. They increased their expenditures in the past three years in the face of increasing construction material costs, and the state treasuries are now almost tapped out.
Highway and bridge construction fell 16% in October, according to McGraw-Hill Construction, slipping from the strong contracting witnessed earlier in the year.
“Congress was not able to finalize fiscal 2008 appropriations by the start of the new federal fiscal year on Oct. 1, and this may have played some role in October’s decreased amount of highway and bridge starts,” said Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction.
“On a positive note, it’s expected that the 2008 transportation appropriations bill, when enacted, will include a moderate increase for highways and bridges, including more spending directed at bridge maintenance.”
Actually, Congress did pass an omnibus appropriations bill for the 2008 fiscal year just before the end of the calendar year. It contained, among other things, full SAFETEA-LU funding of $41.2 billion for the highway program. It also included a $631 million RABA bonus, which the president had opposed.
The bill had $1 billion for bridge repair and maintenance, but Buechner said its benefit is weakened by being spread over three years.
ARTBA projects little growth in subway and light-rail construction for 2008. Funding for the federal New Starts Program is up about $100 million, but most of the available funding is already dedicated to ongoing projects.
Airport construction also will be modest, despite growing needs, until Congress completes action on a new aviation authorization measure.
Construction material costs rose a stiff 12.5% in 2005, followed by a 10.8% jump in 2006 and a 5% increase in 2007, held down by the downturn in housing construction, said Buechner. The economist called the price of oil a “wild card” but said construction material prices should continue to ease.
“Asphalt costs will keep going up,” said Buechner, “because of new techniques that allow the refiners to get more gasoline and leave little to nothing for asphalt when they crack the oil into its subproducts. They’ve got this new technique that leaves nothing but kind of a solid residue that they call coke and no asphalt at all. That’s probably going to be a problem.”
Fully equipped for the future
In the construction equipment industry, manufacturers expect the market to rebound in 2008, according to the annual forecast of the Association of Equipment Manufacturers (AEM). Overall, equipment sales for the U.S. manufacturers are expected to increase 2.8% in 2008 over 2007, 2.9% for Canadian companies and 8% for other manufacturers worldwide.
Each year, AEM surveys its construction equipment manufacturer members about expected sales of construction machines.
Several key factors were cited by the survey respondents as affecting future construction equipment sales. One was the housing slump, of course, plus the health of the overall economy and credit availability. Adequate transportation funding, the strength of the dollar against other currencies and commodity prices also were mentioned as important factors.
“Overall, we’ve seen a slowdown in the past year or so, but it comes after some very good years for the equipment manufacturing industry,” stated AEM President Dennis Slater. “The residential housing slump in the United States has sent ripples across the entire economy, not only the construction industry. However, growth in nonresidential construction continues to offset losses in the housing market. For equipment manufacturers, the continued global demand for construction machinery is also balancing the slowdown in our domestic business. Economic signals are mixed, but there is guarded optimism that our economy will remain resilient and not descend into recession.
“The public works sector has grown steadily over the past decade and road building is an important contributor,” said Slater. “We have guaranteed funding for the next few years under SAFETEA-LU federal transportation legislation, which will provide some stability for construction equipment manufacturing. However, it is a continuing fight to ensure that the authorized funding is actually released each year. And, a major concern is the estimated multibillion-dollar shortfall in the Highway Trust Fund.”
The AEM annual outlook forecast covers 71 product types and 23 types of attachments and components, grouped into seven general categories. AEM conducts the survey in the third quarter of the year and consolidates manufacturers’ estimates of overall business activity. Each forecast is the average of responses from companies in each product line, predicting industry-wide expectations rather than individual company performance, and unit sales rather than company profitability. The complete survey will be online at www.aem.org in the Industry Trends section.
Bituminous equipment includes asphalt plants and pavers; cold planers; pneumatic, static and vibratory rollers; and soil stabilizers. Concrete and aggregate equipment includes crushers; screens; feeders; conveyors; washing equipment; rock drills; concrete batch plants and pavers; concrete truck mixers; and dewatering screens.
The earthmoving segment includes crawler and wheeled excavators; rear dump and articulated haulers; backhoe, crawler, wheel, compact and skid-steer loaders; motor graders; crawler tractors; trenchers and ditchers; wheeled log skidders; horizontal directional drills; and scrapers.
Lifting equipment includes aerial work platforms; knuckle and telescopic boom truck cranes; all-terrain, hydraulic-truck and rough-terrain cranes; lattice boom cranes; rough-terrain and truck-mounted forklifts; tower cranes; and telescopic handlers.
The light equipment market includes machines such as hydraulic and pneumatic breakers; vibratory plate compactors; concrete screeds, saws and vibrators; pumps and trowels; generators; light towers; towable mixers; contractor pumps; power buggies; vibratory walk-behind rollers; air compressors; lasers; core rigs; and truck-mounted air compressors.
Miscellaneous equipment includes heavy-duty trucks; earth drills; landfill/refuse compactors; mobile concrete breakers; side dump and flatbed trailers; sewer vacs; environmental grinders; trench shoring equipment; and trenchless equipment.
Attachments and components include buckets; quick couplers; augers; demolition shears; pulverizers/crushers; electronic and hydraulic components; brake systems; saw blades; rippers and scarifiers; truck bodies; compactors; grapples; blades; rakes; forks; trenchers; snowblowers; powertrains; tires/wheels; and engines.