Tag Archive for 'bridges'

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ARA Reports that the equipment rental industry poised for stronger growth

ARA five-year forecast calls for revenue to reach $59.4 billion in 2021

ARA now projects U.S. equipment rental revenue to reach $49.4 billion in 2017, up 4.5 percent over last year. The February forecast projected U.S. equipment rental revenue of $48.9 billion in 2017 and an average annual growth rate of 4.6 percent to reach $56 billion in 2020.

The May 3 forecast calls for U.S. rental revenue to grow 4.7 percent in 2018, 5.1 percent in 2019, 4.6 percent in 2020 and 4.4 percent in 2021 to reach $59.4 billion combined for the three segments of the industry including construction/industrial, general tool/light construction and party/special event.

This is the second consecutive quarterly forecast to project stronger growth during the forecast period compared to the previous quarterly update of the ARA Rental Market Monitor™ subscription service by IHS Markit™, the economic forecasting firm that compiles the data and analysis as part of a partnership with ARA and Rental Management.

“The equipment rental continues to post strong performance numbers with annual revenues closing in in the $50 billion mark this year,” says John McClelland, ARA’s vice president for government affairs and chief economist.

“The issues going forward are how the Congress is going to deal with tax reform and infrastructure spending. If tax reform can lower rates and simplify the code for all businesses that could be a sign of even stronger growth and a strong infrastructure bill will add to that momentum,” McClelland says.

Scott Hazelton, managing director, IHS Markit, says weak first quarter numbers for the U.S. gross domestic product (GDP) masked solid demand for investment, which will help fuel growth in equipment rental revenues.

“Construction growth has remained robust. While it will moderate over the year, it will support significant rental potential,” Hazelton says. “Reduced headwinds from exchange rates and improving business confidence also are aiding the industrial sector and its equipment rental demands.”

Hazelton also says policy uncertainties continue to temper the forecast because of unknowns. “Good decisions could improve the outlook while poor ones could substantially diminish it. However, the trends to date suggest strong equipment rental demand for 2017, 2018 and beyond,” he says.

Despite sluggishness in nonresidential construction, contractions in real residential construction and uncertainty of additional infrastructure spending, the construction and industrial equipment segment and general tool rental segment are projected to achieve compound annual growth rates (CAGRs) of 4.1 percent and 6.1 percent, respectively, between 2017 and 2012, according to the ARA Rental Market Monitor.

In addition, party and event rentals will benefit from continued improvement in consumer spending and rental revenue is projected to show a 5.8 percent CAGR over the 2017 to 2021 period. Total equipment rental revenue is expected to grow at a CAGR of 4.7 percent between 2017 and 2021.

In Canada, the five-year forecast calls for accelerating revenue growth each year, starting with a 2.7 percent increase in 2017 to reach $5.12 billion. Total rental revenue is expected to grow another 3.1 percent in 2018, 4.2 percent in 2019, 5.3 percent in 2020 and 5.9 percent in 2021 to reach $6.13 billion.

Construction and industrial equipment and general tool rental revenues are expected to grow at CAGRs of 4.7 percent and 4.3 percent, respectively, through 2021. Party and event rental is expected to grow at a CAGR of 4.2 percent, benefitting from stable consumer spending and a rebound in corporate disposable income in Canada. Total rental revenue in Canada is pro9jected to grow at a CAGR of 4.6 percent between 2017 and 2021, according to the ARA Rental Market Monitor.

About ARA: (www.ARArental.org) The American Rental Association, Moline, Ill., is an international trade association for owners of equipment rental businesses and the manufacturers and suppliers of construction/industrial, general tool and party/event rental equipment. ARA members, which include more than 10,000 rental businesses and more than 1,000 manufacturers and suppliers, are located in every U.S. state, every Canadian province and more than 30 countries worldwide. Founded in 1955, ARA is the source for information, advocacy, risk management, business development tools, education and training, networking and marketplace opportunities for the equipment rental industry throughout the world.

About IHS Markit™: (www.ihsmarkit.com)

IHS Markit (Nasdaq: INFO) is a provider of critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 key business and government customers, including 85 percent of the Fortune Global 500 and the world’s leading financial institutions. Headquartered in London, IHS Markit is committed to sustainable, profitable growth.

 

TRIP Reports: Minnesota Faces $2.8 Billion Transportation Funding Shortfall

Minnesota Faces $2.8 Billion Transportation Funding Shortfall, Leading To Increasingly Deteriorated & Congested Roads Amid Declining Transportation Funding. Between $779 Million To $1 Billion In Needed Projects Outside Major Urban Areas Not Able To Move Forward

Amid a declining level of funding available for maintenance and improvement to the state’s roads and bridges, Minnesota faces a $2.8 billion transportation funding shortfall over the next four years, leading to deteriorating road and bridge conditions, a lack of safety improvements, and increasing congestion due to increases in vehicle travel. This is according to a new report by TRIP, a Washington, DC based national transportation organization. TRIP’s report identifies unfunded transportation projects in areas outside the Twin Cities, Rochester and Duluth areas, costing between $779 million and $1 billion, that are needed to improve conditions, relieve traffic congestion and improve traffic safety. The amount of funding available for road maintenance and improvements by the state, counties and municipalities is projected to decrease by 16 percent from FY2016 to FY2021.

The TRIP report, Moving Minnesota Forward: Challenges in Providing Safe, Efficient and Well-Maintained Roads, Highways and Bridges,” examines road and bridge conditions, travel trends, economic development, highway safety, transportation funding, and the status of needed transportation improvements in statewide and in the Twin Cities, Rochester and Duluth areas.

Twenty-eight percent of Minnesota’s major locally and state-maintained, urban roads and highways have pavements in poor condition and 21 percent are rated in mediocre condition. Sixteen percent of the state’s major urban roads are rated in fair condition and the remaining 35 percent are rated in good condition. Due to a lack of funding, the number of lane miles of state-maintained roads in poor condition is projected to increase by 80 percent from 2015 to 2020, from 535 miles in poor condition to 963 miles.

Six percent of Minnesota’s bridges are structurally deficient, meaning there is significant deterioration to the major components of the bridge. The Minnesota Department of Transportation (MnDOT) estimates that, based on available funding, the number of state-maintained bridges rated in poor condition will increase by approximately 70 percent between 2016 and 2020, from 23 bridges to 39 bridges.

“The data is clear,” said Julie Ring, executive director of the Association of Minnesota Counties. “Minnesota’s transportation system is facing critical needs and the cost of maintaining and improving our network of roads, bridges and transit systems grows every year. It’s time for the Legislature and Governor to compromise and move forward a comprehensive transportation funding package that addresses the needs throughout our state.”

Increasing levels of traffic congestion cause significant delays in Minnesota, particularly in its larger urban areas, choking commuting and commerce. Minnesota drivers in the state’s largest urban areas lose as much as 47 hours annually as a result of traffic congestion, totaling up to $1,035 in lost time and wasted fuel each year.

The chart below details needed projects outside the state’s largest urban areas that will not have adequate funding to start prior to 2022. The report also includes needed but unfunded projects in the Duluth, Rochester and Twin Cities urban areas.

 

“With an already large transportation funding shortfall and a dwindling level of transportation funding available in the coming years, Minnesota is poised to see increasingly deteriorated and congested roads in the future,” said Will Wilkins, executive director of TRIP. “Additional transportation funding will allow the state to move forward with dozens of needed projects that will provide a smoother, safer and more efficient transportation system for drivers, and allow the state’s businesses to maintain and expand their competitive edge.”

Executive Summary

A decade after the nation suffered a significant economic downturn, Minnesota’s economy continues to rebound. The rate of economic growth, which is greatly impacted by the reliability and condition of the state’s transportation system, has a significant impact on quality of life in the North Star State.

Minnesota’s transportation system provides economic and social benefits by affording individuals access to employment, housing, healthcare, education, goods and services, recreation, entertainment, family, and social activities. It also provides businesses with access to suppliers, markets and employees, all critical to a business’ level of productivity and ability to expand. Reduced accessibility and mobility – as a result of traffic congestion, a lack of adequate capacity, or deteriorated roads, highways, bridges and transit facilities – diminishes a region’s quality of life by reducing economic productivity and limiting opportunities for economic, health or social transactions and activities.

The state faces a $2.8 billion shortfall in funds needed over the next four years to make needed improvements to its transportation system. The annual shortfall during this period is projected to more than double, leaving dozens of needed transportation projects throughout the state stranded on the drawing board and unable to proceed.

With population and employment growing steadily, Minnesota must continue to improve its transportation system to foster economic growth and maintain and attract business. In addition to economic growth, transportation improvements are needed to ensure safe, reliable mobility. Meeting Minnesota’s need to further modernize its transportation system will require significant local, state and federal funding.

Achieving the state’s goals for a modern, well-maintained and safe transportation system will require additional transportation investments and a commitment to providing roads and highways that are safe, smooth and efficient. While a sound transportation system is key to economic growth and quality of life, numerous transportation projects in the state — which are needed to improve conditions, relieve traffic congestion, improve roadway safety and enhance economic development opportunities — remain unfunded, threatening Minnesota’s future progress in providing a safe, efficient, well-maintained transportation system.

POPULATION, TRAVEL AND ECONOMIC TRENDS IN MINNESOTA

The rate of population and economic growth in Minnesota has resulted in increased demands on the state’s major roads and highways, leading to increased wear and tear on the transportation system.

Minnesota’s population reached approximately 5.5 million residents in 2016, a 12 percent increase since 2000. Minnesota had approximately 3.4 million licensed drivers in 2015.

  • Vehicle miles traveled (VMT) in Minnesota increased by 13 percent from 2000 to 2016 –from 52.6 billion VMT in 2000 to 59.6 billion VMT in 2016. VMT in Minnesota increased five percent just in the last three years (2013 to 2016).
  • By 2030, vehicle travel in Minnesota is projected to increase by another 15 percent.
  • From 2000 to 2015, Minnesota’s gross domestic product, a measure of the state’s economic output, increased by 26 percent, when adjusted for inflation. U.S. GDP increased 27 percent during this time.

ROAD CONDITIONS IN MINNESOTA

A lack of adequate funding has left more than a quarter of Minnesota’s major urban roads and highways with pavement surfaces in poor condition. Based on current funding projections, the condition of state-maintained roads is expected to deteriorate significantly in the future.

  • Overall, 15 percent of Minnesota’s major locally and state-maintained roads and highways have pavements in poor condition and 17 percent are rated in mediocre condition. Fifteen percent of the state’s major roads are rated in fair condition and the remaining 53 percent are rated in good condition.
  • Twenty-eight percent of Minnesota’s major locally and state-maintained urban roads and highways have pavements in poor condition and 21 percent are rated in mediocre condition. Sixteen percent of major urban roads are in fair condition and the remaining 35 percent are rated in good condition.
  • Twelve percent of Minnesota’s major locally and state-maintained rural roads and highways have pavements in poor condition and 17 percent are rated in mediocre condition. Fourteen percent of major rural roads are in fair condition and the remaining 57 percent are rated in good condition.
  • Due to a lack of funding, the number of miles of state-maintained roads in poor condition is projected to increase by 80 percent from 2015 to 2020, from 535 miles in poor condition to 963 miles.

  • Roads rated in poor condition may show signs of deterioration, including rutting, cracks and potholes. In some cases, poor roads can be resurfaced, but often are too deteriorated and must be reconstructed.
  • The chart below details pavement conditions on major, locally and state-maintained roads and highways in the state’s largest urban areas:

BRIDGE CONDITIONS IN MINNESOTA

Six percent of locally and state-maintained bridges in Minnesota that are 20 feet or more in length show significant deterioration and are in need of repair. The share of state bridges that are deficient is expected to increase at current funding levels.

  • Six percent of Minnesota’s bridges are structurally deficient. A bridge is structurally deficient if there is significant deterioration of the bridge deck, supports or other major components. Structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including commercial trucks and emergency services vehicles.
  • MnDOT estimates that, based on available funding, the number of state-maintained bridges rated in poor condition will increase by approximately 70 percent between 2016 and 2020, from 23 bridges to 39 bridges.
  • Six percent (706 of 11,016) of Minnesota’s rural bridges are structurally deficient, while four percent (94 of 2,339) of the state’s urban bridges are structurally deficient.
  • The chart below details the total number of bridges and the share of structurally deficient bridges statewide and in each of Minnesota’s counties.

HIGHWAY SAFETY AND FATALITY RATES IN MINNESOTA

Improving safety features on Minnesota’s roads and highways would likely result in a decrease in the state’s traffic fatalities and serious crashes. Minnesota’s rural roads have a fatality rate that is significantly higher than that on all other roads in the state. It is estimated that roadway features are likely a contributing factor in approximately one-third of all fatal and serious traffic crashes.

  • A total of 1,922 people were killed in Minnesota traffic crashes from 2011 to 2015, an average of 384 fatalities per year.
  • The fatality rate on Minnesota’s non-interstate rural roads in 2015 was nearly three and a half times higher than on all other roads in the state (1.33 fatalities per 100 million vehicle miles of travel vs. 0.40).
  • A disproportionate share of traffic fatalities take place on Minnesota’s rural roads, compared to the amount of traffic they carry. While rural, non-Interstate routes accounted for 34 percent of all vehicle miles of travel in Minnesota in 2015, they accounted for 63 percent of fatalities.
  • The higher traffic fatality rate found on rural, non-Interstate routes is a result of multiple factors, including a lack of desirable roadway safety features, longer emergency vehicle response times and the higher speeds traveled on rural roads compared to urban roads.
  • Rural roads are more likely than urban roads to have roadway features that reduce safety, including narrow lanes, limited shoulders, sharp curves, exposed hazards, pavement drop-offs, steep slopes and limited clear zones along roadsides.
  • Because many rural routes have been constructed over a period of years, they often have inconsistent design features for such things as lane widths, curves, shoulders and clearance zones along roadsides. Rural roads are more likely than urban roads to be two-lane routes with narrow lanes.
  • Most head-on crashes on rural, non-Interstate roads are likely caused by a motorist making an unintentional maneuver as a result of driver fatigue, being distracted or driving too fast in a curve. While driver behavior is a significant factor in traffic crash rates, both safety belt usage and impaired driving rates are similar in their involvement rate as a factor in urban and rural traffic crashes.
  • Many roadway safety improvements can be made to reduce serious crashes and traffic fatalities. These improvements are designed largely to keep vehicles from leaving the correct lane and to reduce the consequences of a vehicle leaving the roadway. The type of safety design improvements that are appropriate for a section of rural road will depend partly on the amount of funding available and the nature of the safety problem on that section of road.
  • Low-cost safety improvements include installing rumble strips along the centerline and sides of roads, improving signage and pavement/lane markings including higher levels of retroreflectivity, installing lighting, removing or shielding roadside obstacles, using chevrons and post-mounted delineators to indicate roadway alignment along curves, adding skid resistant surfaces at curves, and upgrading or adding guardrails.
  • Moderate-cost improvements include adding turn lanes at intersections, resurfacing pavements and adding median barriers.
  • Moderate to high-cost improvements include improving roadway alignment, reducing the angle of curves, widening lanes, adding or paving shoulders, adding intermittent passing lanes, or adding a third or fourth lane.
  • Systemic installation of cost effective safety solutions and devices in rural areas helps to improve safety not just by targeting individual safety problem points on a road, but also by making entire segments safer by improving those roadway segments that exhibit the characteristics that typically result in fatal or serious-injury crashes.
  • Roadway features that impact safety include the number of lanes, lane widths, lighting, lane markings, rumble strips, shoulders, guard rails, other shielding devices, median barriers and intersection design. The cost of serious crashes includes lost productivity, lost earnings, medical costs and emergency services. 
  • Several factors are associated with vehicle crashes that result in fatalities, including driver behavior, vehicle characteristics and roadway features. TRIP estimates that roadway features are likely a contributing factor in approximately one-third of fatal traffic crashes.
  • Where appropriate, highway improvements can reduce traffic fatalities and crashes while improving traffic flow to help relieve congestion. Such improvements include removing or shielding obstacles; adding or improving medians; improved lighting; adding rumble strips, wider lanes, wider and paved shoulders; upgrading roads from two lanes to four lanes; and, better road markings and traffic signals.
  • Investments in rural traffic safety have been found to result in significant reductions in serious traffic crashes. A 2012 report by the Texas Transportation Institute (TTI) found that improvements completed recently by the Texas Department of Transportation that widened lanes, improved shoulders and made other safety improvements on 1,159 miles of rural state roadways resulted in 133 fewer fatalities on these roads in the first three years after the improvements were completed (as compared to the three years prior). TTI estimates that the improvements on these roads are likely to save 880 lives over 20 years. 

MINNESOTA TRAFFIC CONGESTION

Increasing levels of traffic congestion cause significant delays in Minnesota, particularly in its larger urban areas, choking commuting and commerce. Traffic congestion robs commuters of time and money and imposes increased costs on businesses, shippers and manufacturers, which are often passed along to the consumer.

  • The chart below details the number of hours lost to congestion by the average driver in the state’s largest urban areas, as well as the annual cost of traffic congestion per driver in the form of lost time and wasted fuel.

  • Increasing levels of congestion add significant costs to consumers, transportation companies, manufacturers, distributors and wholesalers and can reduce the attractiveness of a location to a company when considering expansion or where to locate a new facility. Congestion costs can also increase overall operating costs for trucking and shipping companies, leading to revenue losses, lower pay for drivers and employees, and higher consumer costs.

TRANSPORTATION FUNDING AND NEEDED TRANSPORTATION PROJECTS

Minnesota faces a significant and growing transportation funding shortfall. Due to inadequate transportation funding in the state, many needed projects that would improve conditions, expand capacity and enhance traffic safety will not move forward, at least for the next five years.

  • MnDOT projections show that the amount of funding available for maintenance and improvements to roads and highways maintained by state, county and local municipalities will decrease by 16 percent from FY 2016 to FY 2021. The chart below details the declining funds available for roads and highways maintained by MnDOT, counties and municipalities from 2016 through 2021.

 

  • MnDOT projects a $2.8 billion shortfall from fiscal year (FY) 2018 to FY 2021 in state transportation funding for state and locally maintained roads, highways and bridges in funding needed to maintain roads, highways and bridges; improve traffic safety; and, make further modernization and capacity improvements to support economic development and quality of life in Minnesota. By FY 2021, the shortfall is expected to more than double from FY 2018, reaching $835 million. The chart below details the additional amount of funding needed each year to improve road and bridge conditions, improve traffic safety, modernize the system, and provide additional capacity. 
  • The chart below details needed preservation or reconstruction projects in Duluth, Rochester, Minneapolis-St. Paul and statewide that currently lack adequate funding to start prior to 2022. These include $429-536 million in projects in Duluth, $1-1.4 billion in projects in the Twin Cities, $43-53 million in projects in Rochester and $289-383 million in projects elsewhere in the state.

  • The chart below details capacity expansion or safety projects in the Twin Cities and throughout the state that are needed but will not have adequate funding to start prior to 2022. These projects include $768 million – $1.1 billion in projects in the Twin Cities area and $490-648 million in projects in other areas of the state. 

FEDERAL TRANSPORTATION FUNDING IN MINNESOTA

Investment in Minnesota’s roads, highways and bridges is funded by local, state and federal governments. Signed into law in December 2015, the five-year federal surface transportation program includes modest funding increases and provides states with greater funding certainty, but falls far short of providing the level of funding needed to meet the nation’s highway and transit needs. The bill does not include a long-term and sustainable revenue source. The nation faces a significant shortfall in needed funding for road, highway and bridge improvements.

  • Signed into law in December 2015, the Fixing America’s Surface Transportation Act (FAST Act), provides modest increases in federal highway and transit spending, allows states greater long-term funding certainty and streamlines the federal project approval process. But the FAST Act does not provide adequate funding to meet the nation’s need for highway and transit improvements and does not include a long-term and sustainable funding source.
  • The five-year, $305 billion FAST Act will provide a boost of approximately 15 percent in national highway funding and 18 percent in national transit funding over the duration of the program, which expires in 2020.
  • In addition to federal motor fuel tax revenues, the FAST Act will also be funded by $70 billion in U.S. general funds, which will rely on offsets from several unrelated federal programs including the Strategic Petroleum Reserve, the Federal Reserve and U.S. Customs.
  • According to the 2015 Status of the Nation’s Highways, Bridges and Transit: Conditions and Performance report submitted by the United States Department of Transportation (USDOT) to Congress, the nation faces an $836 billion backlog in needed repairs and improvements to the nation’s roads, highways and bridges.
  • The USDOT report found that the nation’s current $105 billion investment in roads, highways and bridges by all levels of government should be increased by 35 percent to $142.5 billion annually to improve the conditions of roads, highways and bridges, relieve traffic congestion and improve traffic safety.

 TRANSPORTATION AND ECONOMIC GROWTH IN MINNESOTA

The efficiency of Minnesota’s transportation system, particularly its highways, is critical to the health of the state’s economy. Businesses rely on an efficient and dependable transportation system to move products and services. A key component in business efficiency and success is the level and ease of access to customers, markets, materials and workers.

  • Annually, $519 billion in goods are shipped to and from sites in Minnesota, mostly by truck.
  • Seventy-five percent of the goods shipped annually to and from sites in Minnesota are carried by trucks.
  • Increasingly, companies are looking at the quality of a region’s transportation system when deciding where to re-locate or expand. Regions with congested or poorly maintained roads may see businesses relocate to areas with a smoother, more efficient and more modern transportation system.
  • Highway accessibility was ranked the number two site selection factor behind only the availability of skilled labor in a 2015 survey of corporate executives by Area Development Magazine.
  • The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs and reduced emissions as a result of improved traffic flow.

Sources of information for this report include the Federal Highway Administration (FHWA), the Minnesota Department of Transportation (MnDOT), the Bureau of Transportation Statistics (BTS), the U. S. Census Bureau, the Congressional Budget Office (CBO),the Texas Transportation Institute (TTI) and the National Highway Traffic Safety Administration (NHTSA). All data used in the report are the most recent available.

AEM Welcomes Trump’s Consideration of Gas Tax

Association of Equipment Manufacturers (AEM) President Dennis Slater issued the following statement on Monday regarding President Trump’s declaration that he would consider raising the gas tax:

President Trump deserves credit for having the political courage to publicly acknowledge what so many other elected officials will not: That it’s time to raise the gas tax.

The gas tax is a fair and simple user fee that finances our nation’s vital infrastructure system. Our nation’s roads and bridges have suffered as Congress failed to ensure the gas tax kept pace with the cost of inflation, and increased vehicle fuel efficiency.

That is why equipment manufacturers have urged our elected leaders to consider raising the gas tax as they work to develop a comprehensive strategy to meet our nation’s infrastructure needs. We applaud President Trump for putting this option on the table, and we encourage Congress to give the gas tax a fair look as it considers tax reform and infrastructure investment legislation this year.

ABC Reports: Nonresidential Fixed Investment Surges Despite Sluggish Economic in First Quarter

The U.S. economy’s performance slowed in the first quarter of 2017, but nonresidential fixed investment expanded at an impressive 9.4 percent seasonally adjusted annual rate, according to analysis of U.S. Bureau of Economic Analysis data released today by Associated Builders and Contractors (ABC).

Real gross domestic product (GDP) expanded 0.7 percent on a seasonally adjusted annualized rate during the first three months of the year. Despite the subdued growth, GDP has now expanded in every quarter over the past three years. Fourth quarter 2016 growth was revised upward from a 1.9 percent annual rate of expansion to a 2.1 percent annual rate.

This represents the best quarter for nonresidential fixed investment, a category closely aligned with construction and other forms of business investment, since the end of 2013 and ends more than a year of tepid nonresidential fixed investment growth. Investment in structures, a subcomponent of nonresidential fixed investment, expanded 22.1 percent for the quarter after contracting by 1.9 percent in the fourth quarter of 2016. The other two subcomponents of nonresidential fixed investment—equipment and intellectual property products—expanded at a 9.1 percent rate and a 2.0 percent rate, respectively.

“It was expected that first quarter GDP would indicate that the U.S. economy remained unable to generate a high rate of growth,” said ABC Chief Economist Anirban Basu. “Many economic actors appear to have adopted a cautious attitude in an environment characterized by a considerable amount of policy uncertainty. The decline in defense expenditures is likely to be a surprise to many given recent discussions about supposed vast increases in defense outlays.

“The investment in nonresidential structures during the first three months of the year is particularly remarkable in an environment otherwise characterized as generating little economic growth,” said Basu. “Rather than adopt a wait-and-see attitude, developers appear to have acted with conviction, taking advantage of growing confidence among investors and other market participants to forge ahead with planned projects. While the new presidential administration has yet to implement even a small fraction of its pro-business agenda, the development community continues to express confidence in the administration’s ability to create the conditions necessary for a much more vibrant U.S. economy.

“The expectation is that the balance of the year will be associated with much more rapid growth,” said Basu. “Consumer spending should pick up after a weak first quarter, given accelerating wage increases and elevated levels of job security. Business spending is also likely to expand briskly, particularly if the Trump administration is able to make meaningful progress on the corporate and personal income tax front.”

TRIP Reports: Kansas Motorists Lose $2.7 Billion Per Year On Roads That Are Rough, Congested & Lack Some Safety Features

Kansas Motorists Lose $2.7 Billion Per Year On Roads That Are Rough, Congested & Lack Some Safety Features – As Much As $1,600 In Some Areas. Kansas’ Ability To Repair And Improve Transportation System Hampered By $2.4 Billion Transfer Of Highway Funds To State General Fund From 2011 To 2017.

Roads and bridges that are deteriorated, congested or lack some desirable safety features cost Kansas motorists a total of $2.7 billion statewide annually – as much as $1,600 in some urban areas – due to higher vehicle operating costs, traffic crashes and congestion-related delays. The ability of the Kansas Department of Transportation to repair and improve the state’s transportation system has been hampered by the transfer of $2.4 billion in state highway funds to state general funds between FY2011 and FY2017, according to a new report released today by TRIP, a Washington, DC based national transportation organization. Governor Sam Brownback’s FY 2018/FY 2019 budget proposal would increase transfers of state highway funds to state general funds and other state agencies to $3.4 billion from FY 2011 to FY 2019.

The TRIP report, Kansas Transportation by the Numbers: Meeting the State’s Need for Safe, Smooth and Efficient Mobility,” finds that throughout Kansas, more than one-third of major, locally and state-maintained urban roads are in poor or mediocre condition and nine percent of Kansas’s locally and state-maintained bridges are structurally deficient. The state’s major urban roads are becoming increasingly congested, with drivers wasting significant amounts of time and fuel each year. Kansas’ rural roads have a traffic fatality rate four-and-a-half times higher than on all other roads.

Driving on Kansas roads costs the state’s driver $2.7 billion per year in the form of extra vehicle operating costs (VOC) as a result of driving on roads in need of repair, lost time and fuel due to congestion-related delays, and the costs of traffic crashes in which the lack of adequate roadway safety features likely were a contributing factor. The TRIP report calculates the cost to motorists of insufficient roads in the Johnson/Wyandotte County, Topeka and Wichita urban areas. A breakdown of the costs per motorist in each area along with a statewide total is below.

The TRIP report finds that 37 percent of Kansas’ major locally and state-maintained urban roads and highways have pavements in poor condition and 26 percent are rated in mediocre condition. Thirteen percent of the state’s major urban roads are in fair condition and the remaining 24 percent are rated in good condition. Driving on rough roads costs Kansas drivers an additional $1 billion each year in extra vehicle operating costs, including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear. The report found that deferring maintenance on roads and highways can greatly increase long-term repair costs, with each dollar of deferred maintenance on roads and bridges being found to cost an additional $4 to $5 in needed future repairs.

“The economic vitality of our state depends on Kansas commerce, which in turn relies on safe and well-maintained roads and bridges,” said Rodney George, senior vice president of The Benning State Bank. “Our customers, many of which are farmers who need to get their products to market, depend on good roads every day. The financial stress of an underfunded infrastructure program impacts many more businesses and people than just road and bridge construction companies. Kansas citizens deserve a well-funded and sustainable roads program.”

Traffic congestion throughout the state is worsening, costing the state’s drivers $1 billion annually in lost time and wasted fuel. Traffic congestion robs commuters of time and money and imposes increased costs on businesses, shippers and manufacturers, which are often passed along to the consumer.

Nine percent of Kansas’ bridges are structurally deficient. A bridge is structurally deficient if there is significant deterioration of the bridge deck, supports or other major components. Structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including commercial trucks and emergency services vehicles.

Traffic crashes in Kansas claimed the lives of 1,881 people between 2011 and 2015, an average of 376 fatalities per year. Kansas’s overall traffic fatality rate of 1.13 fatalities per 100 million vehicle miles of travel is the same as the national average.

“Our Chamber members and Johnson County voters recognize the importance of a quality, well-maintained, comprehensive transportation network of highways, roads and bridges throughout the state of Kansas,” said Tracey Osborne, president of the Overland Park Chamber of Commerce. “They understand that the speed, reliability, capacity and overall effectiveness of the state’s transportation system are crucial not only for quality of life for our residents, but also for job creation, economic development, and business retention and expansion in Kansas. We are all concerned with delays in previously approved projects as well as significant curtailment of regular maintenance of highways and bridges throughout the state as a result of the diversion of funds from the Kansas Highway Fund and the deterioration of the quality of our highways and bridges. This work will only become more expensive with time, costing us more the longer it is put off; thus, we strongly support protecting existing transportation funding sources at the state level and a federal multi-year funding plan for the nation’s surface transportation infrastructure.”

The efficiency and condition of Kansas’s transportation system, particularly its highways, is critical to the health of the state’s economy. Annually, $395 billion in goods are shipped to and from sites in Kansas, mostly by truck. Eighty-two percent of the goods shipped annually to and from sites in Kansas are carried by trucks and another 12 percent are carried by courier services or multiple mode deliveries, which include trucking.

“The condition of Kansas’s transportation system will worsen in the future as additional monies are diverted away from the highway fund, leading to even higher costs for drivers,” said Will Wilkins, TRIP’s executive director. “In order to promote economic growth, foster quality of life and get drivers safety and efficiently to their destination, Kansas will need to make transportation funding a top priority.”

Executive Summary

KANSAS TRANSPORTATION BY THE NUMBERS:

 Meeting the State’s Need for Safe, Smooth and Efficient Mobility

Ten Key Transportation Numbers in Kansas

 

$2.7 billion

Driving on deficient roads costs Kansas motorists a total of $2.7 billion annually in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.
Johnson/Wyandotte Counties – $1,596

Topeka – $1,453

Wichita – $1,597

TRIP has calculated the cost to the average motorist in the state’s largest urban areas in the form of additional VOC, congestion-related delays and traffic crashes. Drivers in the state’s largest urban areas incur annual costs as a result of driving on deficient roads as follows: Johnson/Wyandotte Counties – $1,596; Topeka – $1,453; Wichita – $1,597.
 

 

$2.4 billion

$3.4 billion

The ability of the Kansas Department of Transportation (KDOT) to repair and improve the state’s transportation system has been hampered by the transfer of $2.4 billion in state highway funds to state general funds and other state agencies between fiscal year 2011 and fiscal year 2017. Governor Sam Brownback’s FY 2018/FY 2019 budget proposal would increase transfers of state highway funds to state general funds and other state agencies to $3.4 billion from FY 2011 to FY 2019.
 

14%

15%

Vehicle miles traveled (VMT) in Kansas increased by 14 percent from 2000 to 2016 –from 28.1 billion VMT in 2000 to 32.1 billion VMT in 2016. By 2030, vehicle travel in Kansas is projected to increase by another 15 percent.
4 1/2 X The fatality rate on Kansas’ rural roads is approximately four-and-a-half times greater than the fatality rate on all other roads in the state (2.24 fatalities per 100 million VMT vs. 0.50).
 

37%

Thirty-seven percent of Kansas’ major urban roads are in poor or mediocre condition. Eight percent are in fair condition and the remaining 56 percent are in good condition.
$1 = $4 to $5 Every $1 of deferred maintenance on roads and bridges has been found to cost an additional $4 to $5 in needed future repairs.
 

9%

Nine percent of Kansas’ bridges are structurally deficient, meaning they have significant deterioration to the major components of the bridge.
Johnson/Wyandotte Counties – 39 hours

Topeka – 16 hours

Wichita – 35 hours

Mounting congestion robs drivers of time and fuel. Annual time wasted in congestion for drivers in the state’s largest urban areas is as follows: Johnson/Wyandotte Counties – 39 hours, Topeka – 16 hours, Wichita- 35 hours.
 

$1.00 = $5.20

The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs, and reduced emissions as a result of improved traffic flow.

Executive Summary

The rate of economic growth in Kansas, which is greatly impacted by the reliability and condition of the state’s transportation system, has a significant impact on quality of life in the Sunflower State. Yet, the ability of Kansans to reap the quality of life and economic benefits of a well-maintained, safe and efficient transportation system is threatened by the continued diversion of state highway funds to the state’s general fund.

An efficient, safe and well-maintained transportation system provides economic and social benefits by affording individuals access to employment, housing, healthcare, education, goods and services, recreation, entertainment, family, and social activities. It also provides businesses access to suppliers, markets and employees, all critical to a business’ level of productivity and ability to expand. Reduced accessibility and mobility – as a result of traffic congestion, a lack of adequate capacity, or deteriorated roads, highways, bridges and transit facilities – diminishes a region’s quality of life by reducing economic productivity and limiting opportunities for economic, health or social transactions and activities.

With an economy based largely on manufacturing, agriculture and natural resource extraction, the quality of Kansas’ transportation system plays a vital role in the state’s economic growth and quality of life.

In this report, TRIP looks at the top transportation numbers in Kansas as the state addresses modernizing and maintaining its system of roads, highways, bridges and transit.

COST TO KANSAS MOTORISTS OF DEFICIENT ROADS

An inadequate transportation system costs Kansas motorists a total of $2.7 billion every year in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.

  • Driving on rough roads costs Kansas motorists a total of $1 billion annually in extra vehicle operating costs. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.
  • Traffic crashes in which roadway design was likely a contributing factor costs Kansas motorists a total of $730 million each year in the form of lost household and workplace productivity, insurance and other financial costs.
  • Traffic congestion costs Kansas motorists a total of $1 billion each year in the form of lost time and wasted fuel.
  • The chart below details the average cost per driver in the state’s largest urban areas and statewide.

POPULATION, TRAVEL AND ECONOMIC TRENDS IN KANSAS

The rate of population and economic growth results in increased demands on a state’s major roads and highways, leading to increased wear and tear on the transportation system. 

  • Kansas’ population reached approximately 2.9 million residents in 2016, an eight percent increase since 2000. Kansas had approximately 2 million licensed drivers in 2015.
  • Vehicle miles traveled (VMT) in Kansas increased by 14 percent from 2000 to 2016 –from 28.1 billion VMT in 2000 to 32.1 billion VMT in 2016. From 2013 to 2016, VMT in the state increased by six percent.
  • From 2000 to 2015, Kansas’ gross domestic product, a measure of the state’s economic output, increased by 23 percent, when adjusted for inflation. U.S. GDP increased 27 percent during this time.
  • By 2030, vehicle travel in Kansas is projected to increase by another 15 percent.

KANSAS ROAD CONDITIONS

A lack of adequate state and local funding has resulted in 37 percent of major roads and highways in Kansas having pavement surfaces in poor or mediocre condition, providing a rough ride and costing motorists in the form of additional vehicle operating costs.  Deferring maintenance on roads and highways can greatly increase long-term repair costs.

  • The pavement data in this report, which is for all arterial and collector roads and highways, is provided by the Federal Highway Administration (FHWA), based on data submitted annually by the Kansas Department of Transportation (KDOT) on the condition of major state and locally maintained roads and highways.
  • Pavement data for Interstate highways and other principal arterials is collected for all system mileage, whereas pavement data for minor arterial and all collector roads and highways is based on sampling portions of roadways as prescribed by FHWA to insure that the data collected is adequate to provide an accurate assessment of pavement conditions on these roads and highways.
  • Thirteen percent of Kansas’ major locally and state-maintained roads and highways have pavements in poor condition and 24 percent are rated in mediocre condition. Eight percent of the state’s major roads are in fair condition and the remaining 56 percent are rated in good condition.
  • Thirty-seven percent of Kansas’ major locally and state-maintained urban roads and highways have pavements in poor condition and 26 percent are rated in mediocre condition. Thirteen percent of the state’s major urban roads are in fair condition and the remaining 24 percent are rated in good condition.
  • Nine percent of Kansas’ locally and state-maintained rural roads and highways have pavements in poor condition and 23 percent are rated in mediocre condition. Seven percent of the state’s rural roads are in fair condition and the remaining 62 percent are rated in good condition.
  • The chart below details the share of pavement in poor, mediocre, fair and good condition in the state’s largest urban areas.

  • Roads rated in mediocre to poor condition may show signs of deterioration, including rutting, cracks and potholes. In some cases, these roads can be resurfaced, but often are too deteriorated and must be reconstructed.
  • Driving on rough roads costs Kansas motorists a total of $1 billion annually in extra vehicle operating costs. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.
  • Long-term repair costs increase significantly when road and bridge maintenance is deferred, as road and bridge deterioration accelerates later in the service life of a transportation facility and requires more costly repairs. A report on maintaining pavements found that every $1 of deferred maintenance on roads and bridges costs an additional $4 to $5 in needed future repairs.

KANSAS BRIDGE CONDITIONS

Nine percent of locally and state-maintained bridges in Kansas show significant deterioration. This includes all bridges that are 20 feet or more in length.

  • Nine percent of Kansas’ bridges are structurally deficient. A bridge is structurally deficient if there is significant deterioration of the bridge deck, supports or other major components. Structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including commercial trucks and emergency services vehicles. 
  • The chart below details the share of structurally deficient bridges in Johnson and Wyandotte Counties, Topeka and Wichita and statewide.

HIGHWAY SAFETY AND FATALITY RATES IN KANSAS

Improving safety features on Kansas’ roads and highways would likely result in a decrease in the state’s traffic fatalities and serious crashes. It is estimated that roadway features are likely a contributing factor in approximately one-third of all fatal and serious traffic crashes.

  • A total of 1,881 people were killed in Kansas traffic crashes from 2011 to 2015, an average of 376 fatalities per year.
  • Kansas’ overall traffic fatality rate of 1.13 fatalities per 100 million vehicle miles of travel in 2015 was the same as the national average of 1.13.
  • The fatality rate on Kansas’ non-interstate rural roads in 2015 was approximately four-and-a-half times greater than on all other roads in the state (2.24 fatalities per 100 million vehicle miles of travel vs. 0.50).
  • The chart below details the average number of people killed in traffic crashes from 2013 to 2015 in the state’s largest urban areas, as well as the cost per motorist of traffic crashes.

  • Traffic crashes in Kansas imposed a total of $2.2 billion in economic costs in 2015. TRIP estimates that traffic crashes in which roadway features were likely a contributing factor imposed $730 million in economic costs in 2015.
  • According to a 2015 National Highway Traffic Safety Administration (NHTSA) report, the economic costs of traffic crashes includes work and household productivity losses, property damage, medical costs, rehabilitation costs, legal and court costs, congestion costs and emergency services.
  • Roadway features that impact safety include the number of lanes, lane widths, lighting, lane markings, rumble strips, shoulders, guard rails, other shielding devices, median barriers and intersection design. The cost of serious crashes includes lost productivity, lost earnings, medical costs and emergency services.
  • Several factors are associated with vehicle crashes that result in fatalities, including driver behavior, vehicle characteristics and roadway features. TRIP estimates that roadway features are likely a contributing factor in approximately one-third of fatal traffic crashes.
  • Where appropriate, highway improvements can reduce traffic fatalities and crashes while improving traffic flow to help relieve congestion. Such improvements include removing or shielding obstacles; adding or improving medians; improved lighting; adding rumble strips, wider lanes, wider and paved shoulders; upgrading roads from two lanes to four lanes; and better road markings and traffic signals.
  • Investments in rural traffic safety have been found to result in significant reductions in serious traffic crashes. A 2012 report by the Texas Transportation Institute (TTI) found that improvements completed recently by the Texas Department of Transportation that widened lanes, improved shoulders and made other safety improvements on 1,159 miles of rural state roadways resulted in 133 fewer fatalities on these roads in the first three years after the improvements were completed (as compared to the three years prior).   TTI estimates that the improvements on these roads are likely to save 880 lives over 20 years.

KANSAS TRAFFIC CONGESTION

Increasing levels of traffic congestion cause significant delays in Kansas, particularly in its larger urban areas, choking commuting and commerce. Traffic congestion robs commuters of time and money and imposes increased costs on businesses, shippers and manufacturers, which are often passed along to the consumer.

  • Based on Texas Transportation Institute (TTI) estimates, the value of lost time and wasted fuel in Kansas is approximately $1 billion per year
  • The chart below details the number of hours lost to congestion by the average driver in the state’s largest urban areas, as well as the annual cost of traffic congestion per driver in the form of lost time and wasted fuel

 

  • Increasing levels of congestion add significant costs to consumers, transportation companies, manufacturers, distributors and wholesalers and can reduce the attractiveness of a location to a company when considering expansion or where to locate a new facility. Congestion costs can also increase overall operating costs for trucking and shipping companies, leading to revenue losses, lower pay for drivers and employees, and higher consumer costs.

TRANSPORTATION FUNDING IN KANSAS

Investment in Kansas’ roads, highways and bridges is funded by local, state and federal governments. The continued transfer of state highway funds to the state general fund threatens the state’s ability to provide a well-maintained, safe and efficient transportation system. The five-year federal surface transportation program includes modest funding increases and provides states with greater funding certainty, but falls far short of providing the level of funding needed to meet the nation’s highway and transit needs. The bill does not include a long-term and sustainable revenue source. The nation faces a significant shortfall in needed funding for road, highway and bridge improvements.

  • The ability of the Kansas Department of Transportation to repair and improve the state’s transportation system has been hampered by the transfer of $2.4 billion in state highway funds to state general funds and other state agencies between fiscal year 2011 and fiscal year 2017.

 

  • Governor Sam Brownback’s FY 2018/FY 2019 budget proposal would increase transfers of state highway funds to state general funds to $3.4 billion from FY 2011 to FY 2019.
  • $700 million of the $2.4 billion transferred out of the state’s highway fund between FY 2011 and FY 2017 and $200 million out of the additional $1 billion of state highway funds proposed to be transferred in the Governor’s FY 2018/FY 2019 budget proposal, are part of the state’s Transportation Works for Kansas (T-Works) program.
  • Signed into law in December 2015, the Fixing America’s Surface Transportation Act (FAST Act), provides modest increases in federal highway and transit spending, allows states greater long-term funding certainty and streamlines the federal project approval process. But the FAST Act does not provide adequate funding to meet the nation’s need for highway and transit improvements and does not include a long-term and sustainable funding source.
  • The five-year, $305 billion FAST Act will provide a boost of approximately 15 percent in national highway funding and 18 percent in national transit funding over the duration of the program, which expires in 2020.
  • According to the 2015 Status of the Nation’s Highways, Bridges and Transit: Conditions and Performance report submitted by the United States Department of Transportation (USDOT) to Congress, the nation faces an $836 billion backlog in needed repairs and improvements to the nation’s roads, highways and bridges.
  • The USDOT report found that the nation’s current $105 billion investment in roads, highways and bridges by all levels of government should be increased by 35 percent to $142.5 billion annually to improve the conditions of roads, highways and bridges, relieve traffic congestion and improve traffic safety.

TRANSPORTATION AND ECONOMIC GROWTH IN KANSAS

The efficiency of Kansas’ transportation system, particularly its highways, is critical to the health of the state’s economy. Businesses rely on an efficient and dependable transportation system to move products and services. A key component in business efficiency and success is the level and ease of access to customers, markets, materials and workers.

  • Annually, $395 billion in goods are shipped to and from sites in Kansas, mostly by truck.
  • Eighty-two percent of the goods shipped annually to and from sites in Kansas are carried by trucks and another 12 percent are carried by courier services or multiple mode deliveries, which include trucking.
  • Increasingly, companies are looking at the quality of a region’s transportation system when deciding where to re-locate or expand. Regions with congested or poorly maintained roads may see businesses relocate to areas with a smoother, more efficient and more modern transportation system.
  • Highway accessibility was ranked the number two site selection factor behind only the availability of skilled labor in a 2015 survey of corporate executives by Area Development Magazine.
  • The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs and reduced emissions as a result of improved traffic flow.

Sources of information for this report include the Federal Highway Administration (FHWA), the American Association of State Highway and Transportation Officials (AASHTO), the Bureau of Transportation Statistics (BTS), the U.S. Census Bureau, the Texas Transportation Institute (TTI) and the National Highway Traffic Safety Administration (NHTSA).