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Two-Thirds of the Economic Benefits and Jobs Created By Road & Transit Investment Occur in Non-Construction Sectors, New Study Finds

Two-thirds of the economic benefits and jobs created by federal highway and transit investment occur in non-construction sectors, according to a new analysis from IHS Inc. (NYSE: IHS), a leading global source of critical information and insight. The study also finds that every dollar invested through the federal Highway Trust Fund (HTF) in state highway, bridge and public transit infrastructure programs returns 74 cents in tax revenue.

The report, “Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Program,” reveals that 70 percent of the economic benefits, or value- added, of federal HTF investments in transportation improvements occur in non-construction sectors of the economy. Among the sectors that benefit the most are service industries such as business, education, health and leisure, and hospitality.

The study also finds that 62 percent of the jobs created from federal highway and mass transit investments are outside the construction industry. Over one-third of all jobs created are also in service industries like business, education, health and leisure, and hospitality.

“The study shows that investment in transportation infrastructure has a positive impact on every major sector of the U.S. economy. These far reaching economic benefits contribute to economic growth by improving the nation’s capital stock, which enables increased economic activity,” said Karen Campbell, a senior consultant at IHS, who produced the report with Bob Brodesky, a transportation expert and senior manager in the IHS Industry Consulting Group.

Current federal highway and public transit investment, which is about $50 billion annually, generates an average $31 billion in personal income tax receipts per year and $6 billion in federal corporate tax receipts per year due to increased economic activity, according to the analysis. This amounts to 74 cents returned on every dollar invested 

IHS notes that current levels of federal investment on highway and public transit spending contribute nearly one percent to the U.S Gross Domestic Product (GDP), the measure of goods and services produced by the economy. Among the other economic benefits:

  • Every $1 in federal highway and mass transit investment increases the nation’s GDP between $1.80-$2.00
  • Current federal transportation spending contributes on average $410 to real income per household each year

IHS also studied the resulting impacts from five percent annual increases in federal highway and transit investment from 2014-2019, and found the added investment would create:

  • Between 78,000 and 122,000 new jobs by 2019 (includes direct, indirect, and induced jobs);
  • An annual average increase of $40 in real household income each year;
  • An additional $9.6 billion in real GDP for the U.S. economy by 2019; and
  • On average an additional $4.9 billion per year in federal, state and local government

“Federal transportation spending expands the capital stock of the U.S. economy, drives the production and delivery of goods and services, and positively affects business and household incomes,” the study’s authors write. “It also enhances the transportation system’s operational capacity by reducing travel times and costs. This results in greater accessibility for individuals, households and businesses, more efficient delivery of goods and services, improved lifestyles, and standards of living, and safer roadways.”

The members of the Transportation Construction Coalition (TCC), which commissioned the study, said they would send it to all congressional offices to help them better understand the urgency for a permanent solution for the Highway Trust Fund well before May 2015, when funding for the highway and transit program will once again be in jeopardy for the sixth time since 2008. The TCC is issuing this report ahead of the upcoming congressional recess, when many coalition members will be meeting with their elected officials at home. 

Select Comments & Reactions to the Dec. 10 IHS Study:

Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Projects

“The TCC study is a wake-up call to lawmakers who have had their heads in the sand on this issue for far too long. The evidence is clear; the condition of our roads, bridges and transit systems significantly impacts every sector of our economy. We call on Congress to summon the political courage necessary to strengthen the Highway Trust Fund in a way that delivers long-term certainty to transportation planning and opens on ramps to job creation in this country.

Tens of thousands of Operating Engineers depend on these investments for their livelihoods. It is time for Congress to do its work, so that we can do our work building America’s transportation system.”

James T. Callahan, general president, International Union of Operating Engineers

“Our nation’s surface transportation network is in distress, and this study confirms that fact. Chronic underinvestment plagues every mode of transportation and is having a detrimental impact on our ability to compete globally. Congress must get to work and enact a robustly-funded, long-term surface transportation bill – and base the funding on a user-fee principle indexed for inflation. This may be the best way to resolve once and for all the devastating economic impacts that inadequate funding has had on our economy, jobs and the safety of our roads and bridges.”

Thomas J. Gibson, president & CEO, American Iron and Steel Institute

“This report echoes what civil engineers have been warning for years: if we fail to make the investment in our aging transportation infrastructure, our economy will suffer. Our transportation system is the backbone of the economy, and it drives growth in sectors beyond construction. Roads and transit received D grades and bridges received a C+ in the 2013 Report Card for America’s Infrastructure. The low grades are holding our economy back. This report should serve as further incentive for our Congressional leaders to fix the Trust Fund.”

Robert D. Stevens, P.E., Ph.D., president, American Society of Civil Engineers

“The new study echoes what Congress, stakeholders and the American people already know—surface transportation investment drives economic growth and job creation. The time is long overdue for policymakers to put aside partisan differences and provide the resources to rebuild our crumbling infrastructure. Congress must use the TCC study, as well as the countless other reports detailing highway and transit infrastructure investment’s broad economic impact, to build support for immediate and decisive action to invest in surface transportation projects.”

Brian P. McGuire, president & CEO, Associated Equipment Distributors

“A strong transportation network benefits every sector of our economy, and is essential to the prosperity of businesses and households. NECA urges members of Congress to heed the findings of this report, and to make a sound investment in our nation by enacting a robust, long-term transportation bill.”

John Grau, chief executive officer, National Electrical Contractors Association

“This report demonstrates how the benefits from investments in transportation infrastructure extend well beyond the equipment manufacturing sector. For many Americans, this is a pocketbook issue; today’s report shows that federal highway and transit investment supports hundreds of thousands of jobs and contributes $410 per year on average to every household’s real income. That’s why AEM is so proud to join with the TCC coalition to support continued, sustainable investment in our highway and transit infrastructure to help create shared opportunity.”

Dennis Slater, president, Association of Equipment Manufacturers 

“The importance of a long-term, robust and dedicated funding stream not only will keep our economy growing, but will provide the needed transportation infrastructure for businesses to be competitive and for American citizens the quality of roads and bridges they deserve. The Concrete Reinforcing Steel Institute firmly believes in the federal government’s role in planning and delivering transportation services and projects for a 21st transportation system. CRSI supports the passage of a comprehensive, visionary, multi-year reauthorization of surface transportation programs to improve our bridges and pavements, increase mobility and reliability, safety and sustainability.

Bob Risser, president & CEO, Concrete Reinforcing Steel Institute

“While there is strong bipartisan support for the crucial infrastructure upgrades, stopgap measures are not a cost- effective way to improve our most valuable national assets – our roads, highways and bridges. Our nation’s surface transportation infrastructure underpins the economy is essential to growth and prosperity. Congress must come up with a long-term funding solution as states and localities are hesitant to start new projects or finish existing ones out of fear that the federal government won’t meet its funding obligations.”

Mike Johnson, president & CEO, National Stone, Sand and Gravel Association

“What this report makes clear is that our entire economy benefits from federal investments in highway and transit projects. But that economic activity and those jobs are at risk if Congress and the Obama administration can’t figure out a way to pay to get our roads, bridges and transit systems back up to a state of good repair and to meet future travel and shipping needs.”

Stephen E. Sandherr, chief executive officer, Associated General Contractors of America & co-chair of the Transportation Construction Coalition

“What makes this study different is that it focuses on the outcomes of federal-level highway and transit investment and measures its significant impact on every sector of the U.S. economy. This is one policy area where Congress’ involvement could actually yield meaningful and long-lasting economic results for hundreds of industries and millions of households. Our message for the new Congress is simple: Find a permanent solution for the Highway Trust Fund early next year so that state governments have the resources they need to make strategic and economically-beneficial transportation investments.”

Pete Ruane, president & CEO, American Road & Transportation Builders Association & co-chair of the Transportation Construction Coalition

“Good infrastructure is exceedingly important to manufacturers and as the condition of infrastructure has deteriorated over time and spending levels have dipped – awareness has increased among manufacturers and concern over the quality and condition of infrastructure is mounting. Infrastructure is deteriorating due to age and we are not keeping up with the demands placed on the system. Status quo funding levels will not even begin to tackle the problems and address backlogs. The TCC study offers yet another well-researched body of evidence that current approaches are not enough to grow our economy at home and go head-to-head with our competitors abroad.”

Chad Moutray, chief economist, National Association of Manufacturers

 For a copy of the IHS report, Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Program, go to www.transportationconstructioncoalition.org.

EXECUTIVE SUMMARY

Federal transportation spending expands the capital stock of the US economy, drives the production and delivery of goods and services, and positively affects business and household incomes. It also enhances the transportation system’s operational capacity by reducing travel times and costs. This results in greater accessibility for individuals, households and businesses, more efficient delivery of goods and services, improved life styles and standards of living, and safer roadways.

IHS used two models to evaluate the macro and micro economic effects of Highway Trust Fund spending. Both showed the availability of funds delivered to state and local governments have far-reaching indirect effects – for every $1 of federal transportation investment returns between $1.80 – $2.00 of additional real goods and services produced in the economy.

Macroeconomic results revealed that current levels of federal spending on highway and mass transit contributes nearly 1% to the US production of goods and services. The current level of funding contributes on average 614,000 jobs per year over the 2014-2019 time period and adds an average of $410 to each US household’s real income each year. A 5% increase in annual spending through 2019 would result in an average of 59,400 additional jobs per year and an annual average increase of $40 in real household income. Federal spending also produces indirect benefits and induces growth in key economic sectors. The sector that experiences the largest benefit, in terms of jobs created, is the Business and Professional Services sector. The Trade, Transportation and Utilities sector, which includes wholesale and retail companies, is a close second.

In summary, over the 2014 to 2019 time frame:

 Infrastructure spending has an amplified impact on the economy. It leads to overall productivity enhancements and creates jobs.

 Every $1 in federal highway and mass transit investment returns between $1.80 – $2.00 in goods and services produced.

 Current federal transportation spending contributes on average $410 to real income per households each year (which is comparable to a month’s worth of groceries).1

 Current federal transportation spending supports an average of 614,000 employees each year in all sectors of the economy. It catalyzes dynamic effects of greater productivity, more efficient delivery of goods and services, and higher wages and salaries.

 For every 3 construction job created, 5 jobs are created in other sectors of the economy.

 Current federal transportation spending generates $31 billion in federal personal tax receipts per year and $6 billion in federal corporate tax receipts per year on average. Current federal spending also generates higher revenue for state and local budgets, which are, on average, $21.7 billion higher each year than they would be without the Federal Highway Program.

 Five percent annual increases in federal spending would create:

o Between 78,000 and 122,000 new jobs by 2019 (includes direct, indirect, and induced jobs).

o An additional $40 in real household income each year.

o An additional $9.6 billion in real value to the US economy by 2019.

o On average an additional $4.9 billion per year in federal, state and local government revenue, which covers more than 50% of the annual spending needed to cover the backlog in highway and bridge capital expenditures.2

Clearly, transportation infrastructure investment is critical to the economic wellbeing of the US.

For a copy of the IHS report, Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Program, go to www.transportationconstructioncoalition.org

World of Asphalt and AGG1 2013 Exhibit Space Sales Strong

Exhibit space sales for the co-located 2013 World of Asphalt and AGG1 expositions are tracking more than 15 percent ahead of the 2012 show for the same time in the show cycle, with about 11 months to go until opening day. Leading companies will be displaying their newest equipment, products and technologies for the aggregates, asphalt, pavement maintenance and traffic safety sectors.

The co-located World of Asphalt Show & Conference and AGG1 Aggregates Forum & Expo will be held March 19-21, 2013 in San Antonio, Texas at the Henry B. Gonzalez Convention Center.

“Feedback has been overwhelmingly positive from our exhibitors and partner associations as we extend the momentum from our record-breaking 2012 events,” stated Show Manager Rich Prausa.

“The show floor will feature a broad array of the latest industry innovations; attendees will find what they need to get their jobs done with maximum efficiency and productivity,” he added.

Exhibit space rates have not increased since 2009 and are very competitive; a package plan of booth-related services such as material handling is included at no charge in the rates; and membership in the owner/producer trade associations provides a rate discount.

Show management offers exhibitors a variety of sponsorship options, including custom programs, to help companies more effectively achieve their marketing objectives; exhibitors also receive complimentary marketing materials to enhance their customer outreach.

Quality Buyers and a Reputation for Measureable Value

Show attendees are quality buyers interesting in making purchases: 93 percent from 2012 said the shows were valuable to their businesses, and 90 percent were satisfied to very satisfied with their show experience.

A New Products & Technologies Preview Program and Industry Leaders Directory will help attendees more easily connect with the products and people they want to see on the show floor.

World of Asphalt and AGG1’s reputation of offering measureable value and their history as industry-run, customer-driven expositions are key factors in their continued success, added Prausa.

World of Asphalt is owned by National Asphalt Pavement Association (NAPA) with Association of Equipment Manufacturers (AEM) and National Stone, Sand and Gravel Association (NSSGA). AGG1 is owned by NSSGA. AEM produces both shows.

Exhibit space is still available with applications accepted on a first come, first served basis.

For more information on exhibiting at or attending World of Asphalt and AGG1, go online to www.worldofasphalt.com and www.agg1.org.

Hundreds Rally in Washington D.C. to Support Transportation Funding

15 Transportation Construction Industry Associations Rally to Make Transportation Job #1

Leading bipartisan Members of Congress joined hundreds of members of the transportation construction industry and its suppliers in Washington D.C. Tuesday to support the passage of a multi-year, fully funded transportation bill. The second annual RALLY for ROADS brings attention to the impact transportation and highway investment has on our nation’s economy.

“America’s infrastructure is vital to economic growth and job creation,” said Kerri Leininger, a RALLY for ROADS spokesperson and the Senior Vice President of Government and Political Affairs for the National Ready Mixed Concrete Association. “America’s transportation needs are too great, and its impact on the nation’s economic health and well-being are too substantial to delay passage of a surface transportation bill any longer.”

RALLY for ROADS is a bipartisan rally sponsored by 15 national transportation construction associations. Ten members of congress participated in the event including Chairman for the House Transportation and Infrastructure Committee, Rep. John Mica (R-FL) and Democratic Chief Deputy Whip, Sen. Barbara Boxer (D-CA). Representatives from all facets of the road construction, manufacturing, services, retail, agriculture and natural resources industries will join together to support the rally.

“Deficiencies in America’s surface transportation systems have cost households and businesses billions of dollars,” said Leininger. “Our livelihoods depend on America’s roads. The support for RALLY for ROADS from congressional and industry members highlights the importance of getting our nation’s infrastructure back on track.”

“RALLY for ROADS” is sponsored by the American Concrete Pavement Association (ACPA), Associated Equipment Distributors (AED), Association of Equipment Manufacturers (AEM), Associated General Contractors of America (AGC), American Highway Users Alliance (AHUA), American Road and Transportation Builders Association (ARTBA), American Society of Civil Engineers (ASCE), American Traffic Safety Services Association (ATSSA), Concrete Reinforcing Steel Institute (CRSI), National Ready Mixed Concrete Association (NRMCA), National Stone, Sand and Gravel Association (NSSGA), Portland Cement Association (PCA), International Safety Equipment Association (ISEA) the US Chamber of Commerce, and National Association of Manufacturers (NAM)

Second Annual RALLY for ROADS Tuesday March, 20th in Washington D.C.

Nation’s largest transportation advocacy rally to support a fully-funded, multi-year transportation bill

The second annual RALLY for ROADS will take place Tuesday, March 20, 2012 at 11:00am on the National Mall in Washington D.C. Members of 15 transportation construction industry associations will join together to show their support of a fully-funded, multi-year transportation bill. The rally will showcase the role transportation plays on stimulating the economy, maintaining the nation’s global competitiveness and above all, creating American jobs. The Rally will feature employees from all facets of the road construction industry, including materials providers, road pavers, and equipment manufacturers and dealers.

RALLY for ROADS will be hosted by former Texas representative Max Sandlin. Participating speakers include Chairman of the House Transportation and Infrastructure Committee, Rep. John Mica (FL), Rep. John Duncan (TN), Rep. Sam Graves (GA), Rep. Nick Rahall (WV), Rep. John Shimkus (IL), Rep. Jason Altmire (PA), Rep. Tom Petri (WI), Rep. Bill Huizenga (MI), and Rep. Peter DeFazio (OR). Speakers will also include representatives from the manufacturing, services, retail, agriculture and natural resources industries.

 What: RALLY for ROADS

When: Tuesday, March 20th at 11:00am (media set up can begin at 10am)

Where: Between 14th Street NW and 15th Street NW on the National Mall

Who:  American Concrete Pavement Association (ACPA), Associated Equipment Distributors (AED), Association of Equipment Manufacturers (AEM), Associated General Contractors of America (AGC), American Highway Users Alliance (AHUA), American Road and Transportation Builders Association (ARTBA), American Society of Civil Engineers (ASCE), American Traffic Safety Services Association (ATSSA), Concrete Reinforcing Steel Institute (CRSI), National Ready Mixed Concrete Association (NRMCA), National Stone, Sand and Gravel Association (NSSGA), Portland Cement Association (PCA), International Safety Equipment Association (ISEA) National Association of Manufacturers (NAM) and the US Chamber of Commerce

To RSVP please contact Christin Fernandez 202-789-4365, cfernandez@hdmk.org or visit www.rallyforroads.com

World Of Asphalt 2012 Is Already Largest In Show’s History – AGG1 Exhibit Space On Target To Also Be Record-Breaker

The 2012 World of Asphalt Show & Conference is already the largest in the show’s history at more than 70,000 net square feet of exhibit space. Space sales for the co-located 2012 AGG1 Aggregates Forum & Expo have already exceeded the last show and are on track to be a record-breaker as well with more than 26,000 net square feet already reserved.

World of Asphalt and AGG1 will be held March 13-15 at the Charlotte Convention Center in Charlotte, North Carolina. The exhibitions are held annually except in CONEXPO-CON/AGG years and target aggregates, asphalt, pavement maintenance and traffic safety industry professionals.

Attendees will find a broader array of equipment, products and services on the show floor, including an expanded emphasis on pavement maintenance. Many returning companies have increased their space and new-to-the show-companies are signing on to take advantage of this quality venue to connect with customers. Companies range from multinationals with multiple product lines to smaller firms with niche products.

Education is a hallmark of the shows, and attendees have convenient access to more than 90 learning opportunities with the People, Plants and Paving Training Program, the Asphalt Pavement Alliance’s Asphalt Pavement Conference and the AGG1 Academy.

“Attendees tell us that seeing new products is the number-one reason they attend, and they’ll be able to compare the latest technologies and talk with technical experts,” stated Show Director Melissa Magestro. “Our robust education focuses on industry best practices and increases the value quotient of the shows.”

More than 20 industry-related organizations are official supporters of World of Asphalt and AGG1, and both shows are industry-owned and operated. “This is where the industry gathers to network and gain the essential product and operational knowledge they need to stay ahead in these economic times,” Magestro added.

Advance registration is open with reduced exhibit entrance and education fees. Visit www.agg1.org and www.worldofasphalt.com for information on attending or exhibiting.

World of Asphalt is owned by National Asphalt Pavement Association (NAPA) with Association of Equipment Manufacturers (AEM) and National Stone, Sand and Gravel Association (NSSGA). AGG1 is owned by NSSGA. AEM produces both shows.