Construction market weakens

The economic environment for construction worsened significantly over the last month and is almost certain to deteriorate further in the next few months, says an assessment by Reed Construction Data. Recession fears are the reason for the weaker business conditions. The economic environment has turned from positive to neutral in the largely public institutional and heavy construction markets.

Current trends are mixed in the heavy construction market. Starts and job-site spending have weakened slightly for transportation and communications facilities and power generation and distribution. However, these markets are still expanding rapidly as they always do just past the end of a long business expansion. Highway construction has unique problems stemming from the impending collapse of the Highway Trust Fund financing system. Receipts from a fixed-tax-per-gallon cannot keep up with rapidly rising project costs. It now appears that neither President Bush nor Congress will support supplemental funding for highways in an election year. Your comment?