States supporting highways; federal bill less critical

By |  September 14, 2017

The forecast changes in the past few months are negative for 2017 and positive for 2018 and beyond. It is taking longer for some plans to finish the contracting phase resulting in somewhat lower volumes than forecasted a few months ago. However, new support from state and local governments means higher contracts for nonbuilding in the next few years.

Our current situation is showing the benefits of a federal system of government where we are not all waiting for Washington to act. More states are increasing support for highways (i.e., California), making a new federal infrastructure bill less critical. Any new bill coming out of Washington looks like it is going to take longer and be smaller than thought last year during the campaigns.

The map shows a lot of states with lower volumes in 2018. Most of this is owing to lower residential activity and some is due to a surge in volume in 2017. The overall declines are small, and most areas will bounce back in 2019. The map shows another reason why we analyze at the county level – aggregate demand varies greatly by area.

The risks to this outlook are to the upside for 2018 and the downside in 2019. That is, conditions still look good for 2018 so our outlook is somewhat of an outlier, while world events may challenge our expectations of solid growth in 2019.

Dr. David Chereb has many years of experience forecasting construction materials, and his web-based forecasting models have captured every major turning point in materials demand for more than 15 years. Chereb received his Ph.D. in economics from the University of Southern California. He can be reached at

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