Spending still in a slump

News AASHTO September 07, 2004
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Highway construction spending slumped by $1

Highway construction spending slumped by $1.2 billion in July from the prior month, and some $3.1 billion from May spending, according to the latest report on national construction data issued by the Commerce Department.

The drop in highway construction comes at what is normally the peak of the construction season, and at a time when construction in other areas of the economy is increasing to record highs.

The Census Bureau reported that highways and streets, which represents the largest category of government construction spending, declined 1.8% in July to some $65.7 billion. That reflects a drop from $66.9 billion in May. Federal agencies estimate that every $1 billion in highway spending accounts for 42,000 jobs.

"I believe the decline reflects the continuing uncertainty faced by state and local governments over the amount of federal investment they can rely upon in the coming years," said John Horsley, executive director of the American Association of State Highway & Transportation Officials. "TEA-21 expired on Sept. 30, 2003. For almost a year the federal spending has been parceled out in small increments, with no indication of what long-term investment will be enacted. This makes planning for major projects impossible. In addition, states that substituted their own funds to advance construction on federal-aid projects are still waiting to have those funds restored," he said. "The bottom line is that men and women are out of work and transportation improvements are on hold until Congress passes a well-funded, multi-year reauthorization."

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