In early February, Congress finally passed and President Obama signed the American Recovery and Reinvestment Act. More popularly know as the Stimulus Bill, it calls for $787 billion in federal spending to resurrect our moribund economy.
So why do I feel so unstimulated?
Probably because it includes only $111 billion in infrastructure and science spending. To break it down further, $81 billion will be tagged for infrastructure. Getting down the to nitty-gritty, $29 billion will go toward the nation's roads and bridges. To put this in perspective, the entire Big Dig highway relocation project in Boston cost $22 billion. (Estimates vary, but $22 billion is the most widely reported.)
Shortly after Obama was elected, the concrete and construction industries were awash with stories about how hundreds of billions of dollars would be spent to repair and build new highways and bridges. So what do we have? Total road and bridge spending is a bit more than one Big Dig project across all 50 states.
This is what happens when Washington, D.C. gets hold of a good idea. There never was a better time to spend money on infrastructure now and ask questions later to put people back to work at good-paying jobs while the nation's unemployment rate surges toward 10%. Instead, the White House couldn't resist slipping in spending for local goodies like Indian tribe law enforcement, NASA, and funding for non-profit arts projects (just to name a few). Nothing against those projects, but those battles should have been fought separately another day.
Congressional Republicans were no better. Addicted to tax cuts, they are convinced Americans will not horde and bank any tax relief they find in their paychecks. In normal times, no one deplores higher taxes than I do, but these are not normal times. Few will spend the extra $8 to $10 they receive per week.
Some economists (and this non-economist) believe Obama will come back to Congress by this time next year asking for another stimulus bill similar in size as this one, or larger.
World of Concrete
Congress was grappling with the huge spending bill the first week of February while much of the concrete surfaces industry was at World of Concrete in Las Vegas. Infrastructure was on the minds of many of the 65,287 people who attended.
Edward Sullivan, chief economist at the Portland Cement Association, said during a press conference that he would have liked to see a stimulus bill totaling $1.2 trillion. Still, he forecast that the bill passed in February would shorten the current recession by one year, adding that the residential market will recover before the commercial market. Looking ahead, he said the concrete industry is well-positioned in terms of green building and demographics. “The outlook is good, although it may be hard to see that now,” Sullivan said.
There were hopeful signs in the South Hall of the Las Vegas Convention Center, home to many of the concrete repair, restoration, and polishing exhibitors. Although sales were down 10.5% last year for Blastrac, Stephen Klugherz, the equipment manufacturer's global vice president, strategic business development, told me, “We still feel strong and bullish about the polishing market.”
For instance, Wal-Mart and True Value Hardware are polishing floors in hundreds of their stores, Klugherz said. There are also signs of hope in shuttered stores. Kohl's has already bought some of the 175 closed Mervyns stores, and other retailers will eventually re-open some of the 567 locations Circuit City shut down earlier this year. That's a lot of concrete floors to polish. “There will be work in the surface preparation industry,” Klugherz added.
The concrete restoration industry market totaled $15 billion in 2008, or $3 billion less than two years earlier, said Raneir Blair, president and CEO of MAPEI, the manufacturer of concrete repair materials and tools. But, he added, “This is an enormous market with enormous opportunity for those willing to take it.”