Highway Contractor: The Times they are a Changin'
HighwayContractor
By John Latta
Old Dog,
New Tricks
Even with
a strong
foundation and
a long history,
you need to
be willing
and able to
adapt to stay
competitive
today.
I
t’s not 2007 anymore.
Changes in the economy, the way
work is decided on, planned and
done, future expectations, even legislation (finally) and a variety of other factors,
mean the highway and bridge industries
have changed to the extent that successful
companies – and agencies – must adapt to
stay competitive and squeeze the most out
of every dollar.
Most observers feel that the new surface
transportation legislation, MAP-21, provides some short-term stability, certainly
more than living under endless extensions
of the previous legislation, SAFETEA-LU.
But with its inadequate $40 billion a year
and its very short two-year term, MAP-21
does not offer enough for contractors and
agencies to be anything less than cautious
going forward. Given that chaotic extension-fest, few would seem to be willing to
anticipate a smooth road to an adequatelyfunded new bill when MAP-21 ends in
September 2014.
There is another reason for concern
about the amount of funding states will be
able to send to jobsites because most state
budgets remain tepid at best. And many
states are just now facing the bill on a series of bonding measures passed over the
past decade, so we’re likely going to see
increasing portions of existing state DOT
budgets dedicated to repaying bonds.
But companies must move forward.
The extension limbo and the recession,
even with some “stimulus” money available, created a mindset of uncertainty, a
dominance of short-term maintenance and
repair jobs, less work and major unemployment. Continuing state and regional
budget woes will tend to keep the situation
somewhat static, and there are even predictions that total spending on highways and
bridges may fall in the coming years unless
state incomes rise. So even MAP-21’s emphasis on getting more bridges up to standard may bring only moderate upswings
in longer-term work. Then again, that’s
good news today.
Two of the major questions contractors
now face are whether to hire back highly
skilled workers, and whether to invest in
new equipment. While the pressure to be
careful remains intense in these economic
times, the need to get back to a long-term
money-making mode is pressuring the
industry. MAP-21 may appear as such a
positive sign to planners that is impossible
to ignore. It does seem likely that both employment and fleet purchases will expand
because the industry must emerge from
the recession’s “hunkering down” mode.
The other shoe would seem to be the
election. If the pent-up need to get going
again is to be released, the first week of
November may do it.
Better Roads September 2012 11