A Lift from Highways

The trend up in construction was led by road-building contracts. They took a hefty jump of 47% over October last year. For the first ten months, road contracts were 15.5% ahead of 1959.

Most of the rise can be attributed to a loosening of purse strings in the federal road-building program. Washington has allowed states to take all the grants in this three-month quarter that they would normally get in six months, pumping an extra $718 million into the economy this year. (The cost is divided 90% federal, 10% state on interstate highways, fifty-fifty on other roads.) Most states have their share of the cash they must put up because the increased number of cars (latest count: 57,100,000) has boosted gasoline tax revenues, e.g., Virginia will raise her 1961 highway spending 61%, Wisconsin 41%, Michigan 18%, Missouri 8%, Texas 7%.

New Savings. The states are getting another unexpected bonus; highway building costs have run against the trend of all other types of construction and have dropped 4.4% since their 1957 high. California's highway commission says that it has saved "many millions of dollars" from what it expected to pay for roads--and California drivers benefit because the state pours all its savings into new roads.

Costs are down partly because contractors expanded their equipment to get ready for the Federal Government's enlarged program. But it was cut back in 1959 after the Bureau of Public Road, depleted its funds with heavy spending to combat the 1958 recession. Some contractors needed work to pay for their expensive equipment, and they began making low bids, often at cost, to get the work. They complain bitterly about the price-chopping competition. One large builder says his profits are down 50% since 1957: another says his "are so slim they are almost negligible. "

Labor-saving machinery is also playing a big part in holding down costs. Aurora Ill.'s Barber-Greene Co. built a giant $500,000 mobile asphalt plant for Fort Lauderdale's Mobil Asphalt Co., complete with mixing machines, road paver, bunkhouse and machine shop, which rolls under its own power to a job. In a matter of hours it can be set up and with one man operating it, produce 250 tons of asphalt an hour. It will finish in 70 days a 65-mile stretch of highway which was scheduled to take 150 days. Milwaukee's Chain Belt Co. sells a paving machine that squeezes concrete out like toothpaste onto a roadbed without laying any pre-built forms. It slides its own form along with it eliminates twelve to 15 men. General Motors Euclid division developed a machine with giant hydraulically operated teeth that rip out rock at considerably less cost than blasting.

New Methods. State highway departments have also lowered costs by accepting new building methods. Texas gives a contractor a choice of materials to use on a job so that he can pick the cheapest, e.g. steel or prestressed concrete on bridges. Michigan and other states save time and money by making their surveys by aerial photography. Oklahoma has found that building roads across open country rather than following old high ways has cut land-buying costs.

The cost picture is so encouraging that Federal Highway Administrator Bertram Tallamy says it looks as if the $41 billion estimate of the total cost of the federal program is still good. He made it in 1958 after cost increases had forced him to his original 1956 estimate by 45%.

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