Recovery right on target?

Current recession might follow post-World War II pattern

Highway Construction Article February 18, 2002
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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.

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