Market sends mixed signals

There was an increase in highway projects awarded in September, but contractors are still experiencing an increase in material costs.

The American Road & Transportation Builders Association (ARTBA) reported that federal state and local transportation agencies awarded 1,960 highway construction projects valued at nearly $2.38 billion in September. At the same time last year 1,270 projects were awarded valued at nearly $1.96 billion. The surge in highway contract awards brought the year-to-date value to $24.88 billion, just above the $24.76 billion awarded through September 2003.

Lower backlogs and higher prices, however, could impact the market next year. The latest ARTBA quarterly market conditions survey revealed that although 51% of contractors reported working at 90% of capacity or more, other respondents are struggling with a variety of issues, including the amount of work let by state departments of transportation.

Contractors are split on their business outlook for the next 12 months--59% are making plans based on sluggish growth or recession; 41% are expecting normal or above-normal growth.