The concrete pavement market is on pace for significant improvement in 2018 – and it comes amid industry optimism for a new federal gas tax and innovative infrastructure funding, according to the American Concrete Pavement Association (ACPA).
Gerald Voigt, ACPA’s president and CEO, says there’s a strong market outlook fueled by the steadily rising use of concrete overlay technology, along with positive communications from President Trump regarding highway infrastructure funding.
“We have heard directly from the administration that they are working diligently on their infrastructure plan, including innovative ways of funding transportation projects,” Voigt told editors at World of Concrete in Las Vegas last week.
“In short, the narrative is changing in Washington, but we must continue to advocate and educate elected officials on the importance of highway infrastructure investment.”
In the concrete pavement market, there’s been stabilization in 2016 and 2017 following the recession, and now strong growth is forecast.
Prediction: biggest volume increase in 5 years
The volume of mainline concrete pavement generated is projected to hit about 55 million square yards in 2018, Voigt says. That’s up from about 50 million square yards in 2017, which was on par with 2016, he says.
“We anticipate a 5 million square-yard increase over 2017, and this 10-percent increase will represent the largest increase in the market volume over one year that we’ve experienced in the past five years,” he says.
This is especially good news for the industry, he says, given that funding uncertainties have caused many public agencies to defer major capital improvement projects.
He points to continuing evidence from work and state bid lettings that included concrete pavement in 2017, and notes that some of the 2017 data is still being officially reported.
The figures apply mostly to mainline highway and roadway projects. While APCA does not specifically track local streets, roads or industrial and commercial pavements, Voigt explains, “the highway figures are typically a good barometer of concrete pavement volume in these other markets.”
He cites these factors as contributing to the results and the positive outlook:
- There’s solid, continuing use of concrete overlay technology.
- Funding challenges that have plagued the highway sector for more than a decade are increasingly being addressed at the state level.
- The ACPA is “cautiously optimistic” that infrastructure funding challenges will soon be addressed at the federal level.
Steady increase in concrete overlay use
Concrete overlay use has increased steadily for more than a decade. In the past five years, according to Voigt, concrete overlays have accounted for 12.5 percent, on average, of the overall yearly concrete pavement volume nationwide.
“This is significant for our industry because concrete pavement has traditionally been the primary pavement choice for our new roadway construction and reconstruction of our existing pavements,” Voigt says.
“We are at the early stages of a true expansion in the use of concrete pavement technology in the pavement resurfacing market.”
Instrumental in this growth is the development of concrete overlay technology, as well as implementation and education by ACPA, its chapter and especially, the association’s technology partner – the National Pavement Technology Center at Iowa State University, Voigt says.
The work has been in partnership with the Federal Highway Administration.
Pushing for a federal gas tax
During a press conference, Voigt mentioned the recent leak of a draft outlining President Trump’s infrastructure plan. It’s unclear when that draft was written, but Voigt suspects it might have been before Congress passed a rewritten tax code that lacked infrastructure funding.
“We think that might be a little bit of a dated report, based on what we’ve heard, but you can see at least in skeletal matter some of the innovative ideas that are in that report on funding,” Voigt says.
The leaked document does not mention a federal gas tax, but Voigt says industry groups believe that it’s a good possibility. They’re awaiting Trump’s State of the Union address on January 30, when he’s expected to detail infrastructure funding in his long-awaited plan.
The latest published reports on Trump’s infrastructure plan say he’s pushing for about $1.7 trillion in overall investment over the next decade.
ACPA and other industry groups maintain that the easiest way to “fix the infrastructure funding issue is to raise the gas tax,” which can be done immediately, Voigt says.
“It should have been done as part of the tax reform package that just got passed,” a measure for which ACPA and other industry groups had lobbied for as a top priority, he says.
State gas taxes making a difference
Funds raised at the state level are beginning to have an impact, Voigt says. He notes that 39 states hiked at-the-pump fees since the federal government last raised the gasoline tax to 18.4 cents per gallon, at the start of the Clinton Administration.
Those state fees have been used for road construction and maintenance costs.
And in the past four years, 26 states have raised taxes for motor fuels. Eight states raised taxes in the past year alone, including those states viewed as being dominated by “fiscal conservatives,” Voigt says.
“State lawmakers are indicating that the declining condition of their state’s roads and bridges are compelling them to act. This is a good indicator, we feel, that legislators are taking notice and we feel this portends federal action on infrastructure funding.”
Voigt warned that the nation needs to stop using non-indexed gasoline and diesel taxes as the sole means to support Highway Trust Fund, “as this clearly is falling short.”
About a third of the revenue for the HTF comes from the U.S. general fund budget, he says.
“This is not sustainable into the future,” stresses Voigt. “Our association has been and will continue to be working closely with our allies and the highway materials coalition to support this position.”
Equitable funding needed, including for rural areas
“If you think about this idea of carving out for major projects that would come forward with leveraged funding and maybe some private investment, you might imagine most of that would be in urban areas,” Voigt points out in an interview with Equipment World.
“If you’re not using the traditional funding formulas for distributing the funding, that leaves the rural areas out of the game,” he says.
So, in one of the administration briefings, the discussion focused on mechanisms that would prevent the flyover states and rural areas from being left out, Voigt says.