P&Q Editor's Blog

Let the states do it

2008-07-15T18:38:00.000-07:00

If the president and congress won't do it, maybe the governors will. According to an article, improving the nation’s crumbling bridges, roads and sewage systems is a $1.6 trillion problem that governors intend to address in the next year. “It’s not the sexiest of issues, but in many ways, it’s as important as anything we do,” Pennsylvania Gov. Ed Rendell (left) said July 14, as he accepted the chairmanship of the National Governors Association and formally kicked off his infrastructure initiative. Rendell said million-dollar projects like the infamous “bridge to nowhere” in Alaska make voters skeptical that the government is up to the task. “The view is that infrastructure is just a pork-barrel process … We need to bring back public confidence.” Some 70 current and former governors attended NGA’s centennial that celebrated governors’ role in crafting important national policies and programs in the last 100 years, such as welfare reform and the interstate highway system. Your comment?

Housing starts to sink 36 percent

2008-07-07T07:27:00.000-07:00

Housing starts in 2008 are expected to be 36 percent lower than 2007 levels, creating three straight years of declines. according to a recent Portland Cement Association (PCA) economic research report. The toxic mix of weak economic conditions, tight credit conditions and tepid sales are causing huge housing inventory overhangs that must be cleaned up before housing construction can begin its recovery.

"Despite large home price declines and improved affordability, sales remain sluggish and offer little hope that the inventory glut will be worked off anytime soon," said PCA Chief Economist Ed Sullivan. "The economic environment remains weak, being dragged down by high energy costs and weak employment fundamentals."

Sullivan says current home inventories stand at a 10.5-month supply, more than double the 5-month supply that normally accelerates start activity. Continual cutbacks in starts and marginal gains in sales are expected to be more than offset by increases in housing foreclosures that will be added to the market's inventory in 2008 and 2009.

PCA projects an additional one-percent start decline in 2009, with recovery to take place in 2010. Even then, the onset of recovery will vary among regions and states. States that fully participated in the housing boom, like California, Arizona, Nevada and Florida, will have a disproportionally high number of defaults and foreclosures and even more delayed housing start recoveries. Your comment?

Four trends to watch

2008-06-30T17:46:00.000-07:00

FMI, management consultants and investment bankers to the construction industry, identifies four major themes the industry will face in the coming decade:

1. Significant changes in the funding for infrastructure. Current funding will not meet expected needs. The Highway Transit Fund will have a $4.3B deficit by FY 2009, resulting in a $27.3B highway program. The primary funding vehicle (gas tax) is losing purchasing power. Highway construction materials prices are currently up 43% from 2003 and total highway costs, labor and overhead are up 27%.

2. Demand driven by demographics. Growth and congestion are becoming issues of national priority. The cost of travel delays and wasted fuel is currently estimated at more than $67 billion annually. System capacity is considered imperative to remain competitive in the global marketplace – China and India are making tremendous investment in their transportation infrastructure.

3. Competition for scarce resources creating “hyper-competitive” markets. Topping the list of scarce resources is labor shortages. The pool of skilled labor/field management/project managers is shrinking. This is the top issue identified by contractors. In 2008 alone, there were 6 million more jobs than employees and this number is expected to exceed 10 million by 2012. Basic materials such as cement, aggregates, hot mixed asphalt and ready mixed concrete are becoming scarce commodities as well.

4. Technology infiltrating construction in ways that matter to contractors. How will this look? Technology will play a larger role in mitigating workforce shortages, attracting “techno-wonks” to the industry, solving interoperability, construction conflicts, flattening hierarchical organization and changing management from art to science. Your comment?

Highway Trust Fund woes

2008-06-27T09:06:00.000-07:00

According to NSSGA, the House of Representatives passed legislation (H.R. 6327) on June 24 that provides a three-month extension of taxes and spending authority for Federal Aviation Administration (FAA) programs, but dropped from the bill a provision that would have provided an $8 billion fix to restore solvency to the Highway Trust Fund's (HTF). The $8 billion in revenue is needed to ensure that there will not be a 34 percent or higher reduction in highway funds to states below SAFETEA-LU's authorized funding levels in FY 2009 and a loss of 380,000 jobs.

"We are extremely disappointed that Congress did not seize the opportunity to ensure solvency of the Highway Trust Fund," said NSSGA Chairman Steve Sloan, president and CEO of Midwest Minerals, Inc. "We encourage, in fact urge, ourmembers to contact their legislators during the July 4th congressional recess and ask them to take action on the HTF funding deficit or risk the delay, postponement, or cancellation of needed highway projects and the accompanying job losses."

The HTF provision was dropped from the House bill following opposition of Rep. Jerry Lewis (Calif.), the senior Republican on the House Appropriations Committee, and Rep. Paul Ryan (Wis.), the senior Republican on the House Budget Committee. They announced their opposition to the HTF fix in a joint press release which quoted Rep. Lewis as saying, "This bill just exacerbates our transportation funding problem by using an $8 billion taxpayer-funded band-aid on the terminally ill Highway Trust Fund. We need real reform and practical solutions, not more buck passing."

A final attempt in the Senate to pass the FAA extension by unanimous consent with the HTF fix failed when Sen. Jim DeMint (R-S.C.) continued to object.

NSSGA is asking its members to continue to contact their senators and members of the House to restore solvency to the HTF. Your comment?

FasterBetterSafer

2008-06-25T04:02:00.000-07:00

The Association of Equipment Manufacturers (AEM) has been a strong advocate for infrastructure investment, and the organization has announced its support for the FasterBetterSafer campaign of the Americans for Transportation Mobility coalition. The campaign is intended to be a wake-up alarm to urge Congress and the next Administration to increase federal investment in the nation’s aging and overburdened transportation system.

“The business community must intensify its efforts now to educate elected officials on critical transportation needs as Congress prepares to reauthorize the surface transportation program next year,” said Dennis J. Slater, AEM President. “Infrastructure improvement is a top priority for our member companies and our industry. We are keenly aware of the investment that is taking place in other regions of the world, and there is widespread alarm at the lack of adequate investment to modernize infrastructure here in the United States.”

AEM is prepared to commit resources to support the FasterBetterSafer campaign. “The future economic health of our nation depends on a strong transportation network,” Slater noted. Your comment?

Flooding may impact stone producers

2008-06-20T06:02:00.000-07:00

Longbow Research mining and construction-materials analyst David MacGregor lowered his earnings estimates on Martin Marietta Materials and Vulcan Materials. Mr. MacGregor observed, “Both have significant operations near [midwestern] rivers, with most of VMC’s footprint in the Lower Mississippi region. MLM’s footprint near potential flood sites in Iowa is particularly concerning. While VMC appears to have significantly fewer quarries directly impacted by the flooding than MLM, we anticipate potential freight bottlenecks down the Mississippi will have a negative impact on VMC’s distribution network.”

Vulcan Materials Co.: Reducing Estimates on Weather and Flood Concerns

• We are reducing our estimates for VMC to account for inclement weather and flooding in the Midwest.
• While VMC has minimal operations in the region – mainly limited to southern Wisconsin and Chicago – we anticipate transportation bottlenecks could impact rail and barge transport downstream near the Gulf States.
• We are revising our below consensus estimates to $1.13 (-$0.04) for 2Q08 and $3.46 (-$0.06) for FY08. Our FY09E remains at $4.60.
• We continue to rate VMC a BUY with a $98 price target on a favorable view of VMC’s leading position in the aggregates industry, one which we continue to believe will enjoy attractive fundamentals going forward – particularly in key markets of California and Florida.

Martin Marietta Materials: Reducing Estimates on Weather and Flood Concerns

• We are revising our 2Q08 Street-low estimates to $1.78 (-$0.15) and to $6.25 (-$0.20) for FY08. Our FY09 EPS estimate remains at $7.10. We are concerned about the near-term impact of flooding and wet weather during the quarter in a number of MLM's Midwestern markets.
• Our channel checks in Iowa indicated a number of aggregates operators without power for over a week. While MLM’s extensive network throughout the state will afford the Company opportunities to shift production to non-impacted facilities, increased transportation bottlenecks should increase freight costs. We note that major bottlenecks typically disrupt the entire rail network and estimate, based upon reports from various railroads, that roughly 20 percent of the rail network could experience delays.
• We estimate approximately 12-14 percent of MLM’s shipments come from Iowa, Wisconsin and Indiana. While not all facilities are currently at risk for flood-related closures, we anticipate the near-term impact could extend to rail and barge bottlenecks which could then impact operations along MLM’s long-haul distribution network.
• In the long term, MLM could benefit from a recovery in operations caused by the flooding. MLM is the largest producer of railroad ballast in the country, and 10 percent of the company’s business serves nontraditional markets such as ballast and agricultural lime for the Farm Belt. Together with levee reconstruction and the rebuilding of homes and businesses, MLM is well situated to participate in recovery efforts, although the timing and potential positive at this point is unclear.
• While we like the long-term earnings power associated with attractive industry fundamentals and the company's capacity expansion initiatives, near-term concerns regarding FY08-FY09 demand and rising energy costs continue to weigh on our opinion. As a result, we remain neutral on MLM. Your comment?

Mid-Year Report

2008-06-17T05:17:00.000-07:00

McGraw-Hill Construction, part of The McGraw-Hill Companies, has released its annual Construction Outlook Midyear Update, providing insight into the performance of the construction industry through the end of 2008. The major findings of the forecast, authored by Robert Murray, vice president of economic affairs for McGraw-Hill Construction, include:
* New construction starts for 2008 are estimated at $558.5 billion, down 11 percent.
* Single-family housing continues to weaken, with 2008 declines of 28 percent in dollar volume and 31 percent in dwelling units, steeper than what occurred in 2007. The single family market is being adversely affected by falling home prices, mounting inventories, and tight lending conditions.
* Commercial building witnessed further expansion in 2006 and 2007, which carried over into the first quarter of 2008. However, the slower economy and tighter lending conditions are now causing projects to be deferred, and the loss of momentum will take firmer hold as the year proceeds. For 2008, commercial building will retreat 8 percent in dollar volume and 16 peercent in sq. ft. Stores and warehouses are the most vulnerable to decline in the near term, while lesser reductions are anticipated for hotels and office buildings.
* Institutional building in 2008 continues to see a strong amount of educational structures reach groundbreaking, helped in particular by more expansion for colleges and universities. The 2008 forecast for institutional building calls for a 2 percent gain in dollar volume, although square footage will settle back 3 percent.
* Public works construction in 2008 will also rise 2 percent in dollars. The push will come from greater federal funding for transportation projects in fiscal 2008, combined with an elevated focus on infrastructure repair and maintenance. Tighter fiscal conditions at both the federal and state levels of government are an emerging concern for the public works sector, but any restraint on construction is more likely to be experienced next year. Your comment?

Construction outlook mixed

2008-06-12T07:09:00.000-07:00

According to FMI's most-recent Construction Outlook report, economic indicators are somewhat mixed. Housing, credit tightening, consumer spending and inflation continue to hinder the economy. While the general economy begins to stabilize somewhat, nonresidential construction is expected to falter late in 2008 and into 2009.

“The Fed continues cutting rates to stimulate the economy, but inflation is becoming a threat and a pause is likely,” said Heather Jones, construction economist for FMI’s Research Services.

The Construction Outlook also reports that water is an important concern in our nation. Aging infrastructure, population growth and net migration are fueling demand for new and replacement construction especially in the Sunbelt and Rustbelt regions. Water supply and sewage and waste disposal construction will increase by 2 percent and 3 percent in 2008 and by 2 percent and 4 percent in 2009 despite a decrease in state and federal revenues.

Total construction in 2008 and 2009 will be down 4 percent and 1 percent based upon large decreases in residential construction that will not be offset by gains in nonresidential and nonbuilding construction. The decline in 2009 will be driven by a decrease in nonresidential construction for the first time since 2003. Your Comment?

Fatality #10

2008-06-09T15:43:00.000-07:00

According to MSHA, a 52-year-old truck driver with two years experience was fatally injured at a surface crushed-stone mine. The victim backed a truck to the edge of a stockpile to dump. The truck went over a cliff and fell approximately 30 ft. to the floor below. It was the 10th Metal/Nonmetal fatality of the year. Your comment?

Heavy construction update

2008-06-04T17:07:00.000-07:00

According to Reed Construction Data, spending in the heavy construction market is stalled at the September 2007 level, after adjusting for inflation. This is a combination of shortages in many highway trust funds, and a cut back on power facility construction in anticipation of slower expansion of electricity demand during the recession period. Tighter public budgets and the end to more than three years of rising corporate profits also contribute to the stall.

Commercial developers are slowing some ongoing projects and delaying some new project starts until they are more certain that they can lease them for an acceptable rate of return. No significant drop in construction activity is expected because the commercial market is not overbuilt as it was at the onset of recent recessions. A short, shallow recession will not prevent resumed growth later this year.

The institutional building market is stalled at the September 2007 level as the result of very cautious spending budgets adopted by most states for the current fiscal year after three years of booming public spending growth. The budgets are too grim for the recession scenario in the forecast so some relaxation of spending restraints is expected this spring. Your comment?

Production dips again

2008-06-02T17:15:00.000-07:00

U.S. aggregates production has taken another dive. According to the U.S. Geological Survey, an estimated 414 metric tons (Mt) of total aggregates was produced and shipped for consumption in the United States in the first quarter of 2008, a decrease of 16 percent compared with that of the same period of 2007. An estimated 248 million Mt of crushed stone was produced and shipped for consumption in the United States in the first quarter of 2008, a decrease of 14 percent compared with that of the same period of 2007. The estimated U.S. output of construction sand and gravel produced and shipped for consumption in the first quarter of 2008 was 166 Mt, a decrease of 18 percent compared with that of the same period of 2007. Your comment?

Diesel particulate: it matters

2008-05-28T04:29:00.000-07:00

According to reports from the field, the Mine Safety and Health Administration has begun enforcing an exposure limit of 160 micrograms of total carbon (TC) per cubic meter of air (160TC µg/m3) and said it has developed a practical sampling strategy to account for interferences from non-diesel exhaust sources when TC is used as a surrogate for measuring a miner's exposure to diesel particulate matter (DPM). The limit applies to underground metal and nonmetal mines.

The limit has been 350TC. MSHA measures a miner's personal exposure to DPM by analyzing a sample for TC, which is a DPM surrogate obtained by combining elemental carbon (EC) and organic carbon (OC). In its May 2006 DPM final rule, MSHA said it would propose a rule to convert the 160 TC PEL to a comparable EC PEL prior to the effective date of May 20, 2008, if sufficient scientific data were available to support a proposed rule. But MSHA chose not to issue the proposed rule, instead offering a protocol for calculating a location-specific adjustment for situations in which the EC on the miner's personal sample is less than 160 micrograms per cubic meter of air times the error factor for EC, and TC on the miner's personal sample is greater than 160 micrograms per cubic meter of air times the error factor for TC. MSHA said it believes there is still insufficient evidence suggesting an appropriate conversion factor. Read the entire article here. Your comment?

Housing starts up

2008-05-22T03:44:00.000-07:00

Well, at least it's a bit of good news. April 2008 housing-start figures released by the U.S. Census Bureau and Department of Housing were back over the benchmark level of one million units, on a seasonally adjusted annualized basis.

At 1.032 million units, April was the third lowest month in this latest cyclical downturn, according to Reed Construction Data. March, at 954,000 units, and December 2007, at exactly 1.000 million units, were even lower. The first four months of this year have averaged 1.039 million units annualized, which is -28.9 percent versus the first-four-month average of last year, at 1.462 million units.

Housing starts are now down nearly 60 percent from their peak in January 2006 to the present. A strong case can be made, however, that the past five months are likely to be the trough in this cycle for housing starts. All three major new home indicators have moved into alignment. Permits, starts and completions are all right around one million units. The fact that completions have finally fallen to the level of starts is quite positive. Completions-above-starts is one of the factors, along with falling sales, that causes a buildup of unsold inventories.

Employment prospects, which are so influential in terms of establishing consumer confidence, continue to be a sore spot. There were month-to-month job losses in each of this year’s first four months. However, first-quarter Gross Domestic Product (GDP) came in stronger than expected (+0.6 percent) and this may well point to better economic conditions ahead. Your comment?

Vulcan gets vote of confidence

2008-05-20T04:01:00.000-07:00

For those who follow the relationship between stock performance and industry success . . . This morning Longbow Research analyst David MacGregor raised his price target on Vulcan Materials (VMC), based on the company's demonstrated pricing strength, and positioning in key markets. As a result of its shares recently surpassing Longbow's prior target price, the company is raising its target on Vulcan to $98/share (+$20) and maintaining its BUY rating.

The price target of $98 reflects approximately 21x FY09 EPS forecast of $4.60 and 17x FY10E of $5.80. The shares of VMC are currently trading at 18.0x and 14.3x our respective FY09 and FY10 EPS forecasts. This compares to a historical forward P/E range of 11x-21x. "We like the long-term benefits of the combined VMC-FRK and believe the company is well positioned in the California and Florida markets to benefit longer term from a) attractive demographic prospects, b) publicly announced need for infrastructure improvements, and c) supply-constrained local markets.," McGregor said. "We remain impressed by VMC's ability to raise prices above historical "inflation plus" rates during FY08 when we estimate volumes for Legacy VMC to be down approximately 10 percent. In the growth phase of the next cycle, we believe pricing could potentially again increase by a low-teen annual percentage in part due to a) highly consolidated local markets, b) ever-rising replacement costs, and c) a growing market acceptance of significant yearly aggregates price increases." Your comment?

Diesel situation to get dire

2008-05-16T09:09:00.000-07:00

Producers all over the country are struggling with high diesel prices. Well, prepare for prices to go higher. According to a recent report, crude-oil prices have begun another rise following increased demand after the recent earthquake in China. Analysts at Goldman Sachs boosted their oil price predictions for the second half of the year from $107 to a whopping $141 a barrel.

U.S. crude for June delivery was up $2.96 a barrel to $127.08 on the New York Mercantile Exchange. Earlier, crude hit $127.82, topping the previous intraday record of $126.98 set last Tuesday. A week ago, oil closed at a record $125.96 a barrel. "Everything the market looks at is bullish," Peter Beutel, an oil analyst at Cameron Hanover, wrote in a research note.

Diesel fuel has been in tight supply for the last several months following a cold winter in the Northern Hemisphere, and as the popularity of diesel cars grows in Europe and the developing world. With diesel prices outpacing gasoline, refiners in the United States have been ramping up production of diesel and sending it abroad. That has displaced some domestic gasoline production, helping push gas prices higher.

The downline impact of that kind of price escalation could wreak havoc on the general economy, not to mention the P&L sheet of the average producer. Your comment?

Fatality #7

2008-05-15T11:04:00.000-07:00

According to
MSHA, on April 24, 2008, a 48-year-old laborer with 32-weeks experience was fatally injured at an underground industrial-sand mine. The victim was checking the roof and ribs for scaling when she was struck by a front-end loader as it backed up. This is the 7th fatality reported in calendar year 2008 in the metal and nonmetal mining industries. As of this date in 2007, there were 10 fatalities reported in these industries. This is the 2nd Powered Haulage fatality in 2008. There was one Powered Haulage fatality in the same period in 2007. Your comment?

Expect the worst

2008-05-13T10:07:00.000-07:00

The U.S. economy is suffering from a severe economic weakness and its impact on cement consumption and the construction industry will not be mild, according to the latest Portland Cement Association (PCA) forecast of cement, concrete and construction.

In 2008, portland cement consumption is expected to drop 11 percent, followed by an additional 5.5 percent in 2009. PCA predicts total cement consumption in this year to be 101.7 million metric tons. A record consumption of 128 million metric tons was reached in 2005. Peak-to-trough declines in consumption will total nearly 30 million metric tons, marking one of the worst industry downturns since the Great Depression.

"We are currently in the third year of a four-year industry contraction that began in 2006," Edward Sullivan, PCA chief economist said. "High fuel prices, slow job creation, and tight lending standards will all adversely impact the entire spectrum of construction activity."

Sullivan anticipates that while harsh residential conditions continue to act as a significant drag on cement consumption, the nonresidential sector will also see large declines for the next two years.

"Although it grew nearly 11 percent in 2007, nonresidential construction spending is expected to fall almost eight percent in 2008 and another 12 percent in 2009," Sullivan said. "Nonresidential construction is closely tied to economic activity. As the economy softens, the expected return on commercial investments decline, reducing the incentive to build and expand."

An additional slowdown in public construction, which accounts for nearly half of total cement consumption in the United States, is predicted for 2009 and will continue through 2010.

PCA targets the second half of 2010 with the trend of strong growth in cement consumption. By this time, according to the PCA report, all regions of the United States should be experiencing a recovery in housing and nonresidential construction will be on the upswing. Your comment?

Two against one

2008-05-06T08:27:00.000-07:00

According to a report on CNN, repealing the 18-cents-per-gallon gas tax for the summer has become a political football, with presidential candidates Hillary Clinton and John McCain favoring the repeal and Barack Obama lining up against it. "I think [Americans] should have some immediate relief," Clinton said. But the Congressional Budget Office has estimated that suspending the federal gas tax for a period of approximately three months would only save American families on average about $10. per month.

Obama calls the Clinton plan, and a similar proposal by McCain, a sham and pure pandering for votes. "Though most economists agree with him, arguing against a gas tax holiday is tricky politically," said Candy Crowley, CNN senior political analyst.

Industry associations, from AEM, NSSGA and NRMCA on down, are on record as saying a repeal of the gas tax is a bad idea. “Ten dollars a month won’t provide true economic relief to American families and would do virtually nothing to stimulate the economy,” said National Ready Mixed Concrete Association (NRMCA) President Robert Garbini. “The only thing a gas tax holiday would do is put an already near bankrupt Highway Trust Fund (HTF) in further jeopardy, set a bad precedent and potentially cause troubles for transportation infrastructure in the future.” Your comment?

Quarries going green

2008-04-30T10:01:00.000-07:00

Quarries all over the country are starting to embrace sustainable-development principles, environmental management and energy efficiency to a much greater degree than ever before. To a certain extent, this mindset is being driven by some of the major corporations serving the industry. Caterpillar was first on the bandwagon, but many other companies have followed suit. Komatsu just published its guidelines for biodiesel use, Volvo's hybrid loader was a big hit at ConExpo-Con/Agg, and the president of Baldor Electric Motors just announced the company's intention to reduce its environmental footprint. At its corporate press event at ConExpo-Con/Agg, a Caterpiller executive even proclaimed global warming "the key issue of our time." NSSGA has also developed guidelines for sustainability for its members. For quarries, going green is good business. There are important community relations and permitting implications to a green-quarry strategy. But I should also add that many quarries have quietly done much over the years in the name of protecting the environment, from providing a refuge for wildlife on their property to executing great reclamation plans. They just never talked about it much. Well, it's time to get talking. Pit & Quarry has started a monthly "Green" page in the magazine, and we will be featuring news about quarries operating in an environmentally proactive manner. You can send your items to me at mkuhar@questex.com. Your comment?

That sinking feeling

2008-04-24T05:14:00.000-07:00

A huge sinkhole (left, photo from Baltimore Sun) in the highway has developed near Frederick, Md. The media is reporting that the hole on westbound Interstate 70 is 14 ft. wide and 20 ft. deep near the East South Street exit. Get ready for more and more stories like this one, as our highways continue to deteriorate from overuse, weather conditions and other acts of nature. All the more reason to begin work now on an adequately funded highway bill.Your comment?

McCain gas tax idea shortsighted

2008-04-21T09:49:00.000-07:00

The following editorial was published today in The Arizona Daily Star, in John McCain's home state of Arizona, regarding his plan to suspend the federal gas tax for the summer.

Sen. John McCain has famously remarked that economics is not his strong suit, and certainly he proved it last week with his proposal to suspend the 18.4 cent-per-gallon federal gas tax and 24.4 cent-per-gallon federal tax on diesel fuel from Memorial Day to Labor Day.
Americans and the truckers who deliver goods and services to them do in fact need relief from rising gas prices, but McCain's proposal is not the answer. In fact, it fails to address the problems:
● Supply issues that are driving up the cost of fossil fuels.
● The need for Americans to become less dependent on fossil fuels.
A tax holiday would encourage more fuel use, exacerbating supply issues, and it would do nothing to encourage us to reduce our fuel dependency.
The tax holiday is part of McCain's new economic plan to provide relief to American families, which is itself a 180-degree turn from the senator's position of a few weeks ago. At that point he was insisting that no relief package was needed and that the markets should be left to sort themselves out.
Now his idea is to save summer drivers a few dollars per tank of gas. The tax suspension would also reduce costs for truckers, and thus could have a trickle-down effect of reducing food costs (or slowing their rise). McCain and Sen. Jon Kyl, who is co-sponsoring the bill, argue that the money consumers save on gas will provide an "immediate" economic stimulus.
But the gas and diesel tax dollars are dedicated directly to the federal Highway Trust Fund, which maintains and builds roads and highways; the loss of revenue would result in fewer road repairs and construction projects, and fewer jobs for those who do the work. This is a stimulus?
We called McCain's office seeking comment on Friday because we wanted to ask about the groundswell of opposition that the proposal has triggered. Our call was not returned.
● AAA of Arizona noted in an e-mail that "suspending federal fuel taxes for three months would result in an estimated $10 billion in lost revenue to the Highway Trust Fund at a time when we need more, not less, investment in our country's transportation network."
● The American Road & Transportation Builders Associations issued a release listing 10 reasons that "using the tax as a political expediency would be bad public policy." Among them: In Arizona alone $141.5 million in federal highway funds would be lost, putting at risk nearly 5,000 road- and highway-related jobs. Nationwide the number of jobs the tax holiday would put at risk is more than 310,000, the builders group said.
● McCain's fellow Republican senator, Kit Bond of Missouri, immediately dismissed the suspension plan, saying, "I don't see how cutting funds to fix bad roads and fight congestion helps families." Bond told the Kansas City Star that the answer to high gas prices is "tapping oil reserves just waiting ... on our own lands and off our own shores."
● Gov. Janet Napolitano dubbed McCain's gas tax suspension plan a "pander" and said it will only drive the federal government deeper into debt.
"I think the Straight Talk Express has had a total U-turn," she said Wednesday at her weekly press briefing. "I think that's a pander."
Given the titanic flaws in his tax holiday "economic stimulus" plan, it certainly does look like McCain is pandering to voters who'd like to take out the RV this summer or make a long road trip in the SUV — and like he is doing so instead of deliberating about our actual problems: rising fuel costs and a struggling economy.
The gas taxes have an elegant kind of logic: Those who drive on our roads a lot pay more in taxes that then are used to maintain the roads. The taxes aren't the problem, America's dependence on motor fuel is, and so is its rising price.
The presumptive Republican presidential nominee should be working to identify long-term, strategic solutions to the nation's economic and energy problems — not dreaming up drive-to-the-lake-cheap cards for voters. Your comment?

Were pyramids cast-in-place concrete?

2008-04-08T04:17:00.000-07:00

According to a report, researchers are exploring a new controversial theory, which suggests that the great pyramids of Giza may have been cast in place of concrete, rather than quarried and moved into position. The theory is being tested by researchers from Massachusetts Institute of Technology in the US.

Although the idea that the Egyptians may have used a kind of concrete in building the pyramids was first suggested in the 1930s, with a specific material that could have been used proposed in 1988, so far there has been no proof and the idea has remained mired in controversy. Now, in order to help identify blocks that were cast rather than quarried, MIT students are assembling a small pyramid using a combination of both kinds of material.

They will then use techniques such as microscopic imagery and chemical analysis to look for signs that might provide ways of telling the difference on samples from the Great Pyramid itself. According to Linn Hobbs, co teacher of the pyramid-building class at MIT, "The materials and know-how needed to cast the pyramids' giant 2-1/2 ton blocks in place, rather than quarrying and moving blocks of solid limestone, was definitely available to the Egyptians."

At least 90% of the material would have consisted of powdered limestone, and Egyptian limestone is especially fragile and can easily be reduced to finely divided sludge simply by soaking it in water. The rest — the binder or cement — could have been made from materials they were known to have had and used for other purposes.

The binder, known as a geopolymer, could have been made from lime, kaolinite (a kind of clay), a fine silica and natron (sodium carbonate), according to the research. The research also said that in building pyramids, especially the higher layers as the structure grew, casting blocks in place would have been a far easier task than carving them to precise sizes and shapes and then moving them up long earthen ramps into their final positions. Your comment?

Cat raises prices

2008-04-02T06:10:00.000-07:00

The price of just about everything is rising, due largely to world oil prices, and by extension, gas and diesel fuel. So it's no surprise that it is going to cost you more to own a Cat. Caterpillar Inc., the largest maker of construction and mining equipment in the world, announced in a regulatory filing, that it is adjusting product and merchandising prices up to 5 percent. The action "is a result of current general economic conditions and industry factors," and is driven by continuing their long-standing commitment of providing optimal value to customers and stockholders. Caterpillar said details by product will be released to dealers in the coming weeks, and will vary across geographic regions and products. Your comment?

Our national face lift

2008-04-01T04:09:00.000-07:00

The following op-ed was written by Glen E. Tellock, president and CEO, Manitowoc Co., and board chair of the Association of Equipment Manufacturers.

"Crumbling bridges, overcrowded roadways, aging water and wastewater systems diminish our quality of life. The national focus has been on the need to invest public funds into these projects - both as a solution to our infrastructure woes and also as a stimulus to boost the sagging economy.

But the hidden problem of this infrastructure crisis is the lack of skilled workers we will need to solve all these problems. The current construction workforce is getting older and looking forward to retirement. At the same time, demand is growing for skilled labor, creative engineers and trusted safety inspectors. The construction industry expects to create 1 million new jobs over the next five years, and young people, their teachers and their families need to know more about this opportunity.

A new generation of workers is needed to help lead the building and repair of our nation's roads, bridges, schools and more. The machines that make us productive need qualified, educated people to design, manufacture, operate and repair them.

In January, the construction industry launched a student competition - the Construction Challenge. This event is not just about blue ribbons but focuses on introducing young people to challenging careers and connecting them with potential employers. The Construction Challenge aims to share that information, reward students and educate the public about the growing demand for skilled workers in the construction industry.

The Construction Challenge finale was held at CONEXPO-CON/AGG 2008. More than 50 teams competed for scholarships and prizes and the chance to learn new skills and network with leaders from the industry.

Whether they are building schools and skyscrapers, repairing thousands of miles of roads, constructing bridges, or manufacturing the equipment that makes all of this work happen, those working in the construction industry form the basic structures that allow our country - and the world - to work and thrive every day.

The Construction Challenge introduced students to the variety of career paths in the construction industry from manufacturing to in-the-field opportunities. For example, there is a growing demand for trained workers in the trades, such as equipment operators and machinists. These jobs require highly skilled people, some of whom may have to earn at least a two-year technical school degree. Another path is for college graduates looking for such managerial and professional jobs as industrial engineers, safety inspectors, IT managers and even sales professionals. Whatever the path, they all lead to rewarding, good-paying job opportunities for the next generation.

Our national face lift will keep the country moving ahead, create a million new jobs and will require highly skilled individuals to choose careers in the construction industry." Your comment?

The Mineral Baby returns

2008-03-24T07:38:00.000-07:00

Last year, every person in the United States needed more than 23 tons of minerals and energy fuels to maintain their standard of living, according to the Mineral Information Institute (MII). “With the life expectancy in the U.S. now averaging 77.9 years, this means that the average American will need to have 3.6 million pounds of resources to be mined to provide the products and materials they will depend upon in their lifetime,” said President Nelson Fugate. “The population of the U.S. is 302 million people, so this means that last year, nearly 7 billion tons of different rocks and minerals had to be mined somewhere to make the things we use in everyday living.” Decreases in construction projects in 2007 caused a reduction of nearly 1,500 lbs. per person in the consumption of mineral and energy resources, the majority of it aggregates and cement. During the last 15 years, the per person consumption of minerals has fluctuated from 45,500 lbs./person/yr. (2003) to 48,427 lbs./person/yr. (1999), but there are 32 million more people in the country and their life expectancy has increase from 76.7 years to 77.9 years. This required the mining of 400 million more tons of resources than the estimated 6.6 billion tons provided in 1999 and nearly three times the amount of mineral and energy resources required to maintain the U.S. standard of living in 1950, MII said. Your comment?