Highway spending could drop sharply late next year. In September, the Congressional Budget Office announced a projected $5 billion deficit in the federal Highway Trust Fund's Highway Account in fiscal year 2009.
Simonson is also not convinced that the Federal Reserve Board's lowering of short-term interest rates will help boost construction. Lending standards will likely remain tighter than before the housing turmoil began. Lower U.S. interest rates may depress the dollar further, making imports more expensive and possibly pushing up inflation.
Simonson cautions producers to expect greater material cost increases in 2008. He expects prices of construction materials to rise 6% to 8% by the end of the year.
The Energy Information Administration forecasts relatively high, but steadier, diesel prices in 2008. According to its recent energy outook report, “Crude oil prices are projected to decline from their recent peak above $80 per barrel, but monthly average prices are expected to remain above $70 per barrel throughout the forecast period.”
But by early November, after the energy outlook was issued, oil prices were in the low $90s, with speculation that they could hit $100 per barrel.
For a closer look at the numbers affecting your business, we've provided some materials data for 2007 and 2008 in the table and charts.
Visit www.theconcreteproducer.com for an in-depth look at these forecasts and reports.For More Information...
Owners, managers, and businesspeople can find it difficult to sift through the various complicated reports and studies of the economy. THE CONCRETE PRODUCER's Economic Summit at noon, Jan. 22, at the World of Concrete will help you see through the clutter. This event is an exclusive gathering of some of the construction industry's most astute forecasters. To register, visit www.worldofconcrete.com.Related Articles & Links
Looking AheadAssociated General Contractors of America (AGC) Portland Cement Association (PCA)Energy Information Administration
For a more informed view of 2008, take a look at the numbers behind the forecasts.