AMERICA'S ROADS ARE CRUMbling. More than 40% of its bridges need repair or improvement. Many regions will soon face water shortages. All of which is great news for companies large and small.
The country's neglected infrastructure -- public works in old-fashioned parlance -- may soon provide a huge market for companies that do engineering studies, repair roads, or build water systems and power plants. "What will be moving these markets forward is the real economic penalty the economy in general pays for neglect of these systems," says Richard F. Rossi, a Merrill Lynch analyst.
Within a decade, he predicts, publicworks expenditures will rise from around 2% of the gross national product to about 4%, the level in 1965. Rossi estimates total spending will be at least $1 trillion over the next 10 years. The government reports that bridges and roads alone will need $720 billion in repairs by the year 2000.
Highways will get the first attention. Taking advantage of falling gasoline prices, about 20 states are considering gasoline-tax hikes to fund highway projects. One now under way and paid for mostly with federal money is a three-year, $175-million rehabilitation of Philadelphia's Schuylkill Expressway. Five contractors and more than 100 subcontractors are repairing 17 miles of highway, including 50-odd bridges. The project is estimated to create 4,600 on- and off-site construction jobs and 5,800 new jobs at local stores and other businesses.
Further off but probably larger in scope will be work on water and sewage systems. Rossi estimates that annual spending will rise from about $15 billion today to $30 billion or $40 billion by 2000.