Fighting Back

By John Latta and Kirk Landers

Contractors and agencies show no signs of surrendering to economic pressures that in turn show little sign of easing their assault. 

December 22, 1944. Bastogne, Belgium.

U.S. forces pushing Nazi armies back into Germany are suddenly counterattacked in The Battle of the Bulge.

Massive breakthroughs by German armor pummel American soldiers and the Germans are set to break through to the North Sea. This city is surrounded and the

German commander demands U.S. forces surrender or be “totally annihilated.”

General Tony McAuliffe, commanding the 101st Airborne defenders, sends a one word, morale-boosting, in-your-face

reply: “NUTS.” The city is successfully defended. German armies retreat.

Perhaps it’s an American thing. America’s highway and bridge contractors, it seems, are as disinclined as the 101st Airborne to give up despite similarly lousy odds.

And government agencies are also refusing to give an inch more than necessary, searching for openings and ways to win in the face of a frightening economic onslaught.

Better Roads 2009-2010 Forecast Survey, our exclusive annual sampling of road professionals including the government agencies that operate the road budgets and contractors who specialize in road an bridge work, shows the devastating impact of recession but it also suggests that while the industry may not be surging into recovery, it has stabilized at a low point and is beginning to sense some revival.

The numbers are not good. There is no way to disguise or spin that. But within them are indicators that the fight back has begun.

Two factors that were not influential in recent year surveys have the power to change the 2010 landscape unpredictably: Reauthorization and “stimulus” funding.

Potent wildcards

 Reauthorization is in limbo and both government and contracting company planners must make different – conservative, defensive – arrangements without it and the guaranteed flow of predictable funding over a reasonable period of time. Stimulus money for transportation and infrastructure projects has been effective to date according to survey responses and there is more to come – but that funding is likely to come in the same unpredictable way it has to date, making even medium-term planning an adventure. The two factors come together if we consider the impact of the end of stimulus money and the lack of a new surface transportation act to ensure funds keep flowing from Washington.

It is also interesting to see almost half the sample (48 percent) calling ARRA “somewhat effective.” With three percent calling the stimulus programs “very effective” there is a surprisingly strong support level; perhaps it might even be called an endorsement.

Agencies basically felt the recession hit them in the fiscal year before their current one and in this current FY have felt its grip tighten. While state DOT budgets are perhaps more predictably tight, this fiscal year has seen city and country trends virtually as negative as the state trends. What is perhaps most shocking is the degree of loss of this FY over the previous one: 40 percent of the agencies report a decrease in their budget for highway and bridge spending and the average drop is a scary 18 percent.