The only improving heavy construction market drivers are airline passenger miles and construction equipment shipments. Airline traffic is a long lead driver. The rise in equipment shipments reflects mostly rising exports and the delayed replacement of aged equipment at equipment rental houses. The short lead indicators are weakening. This includes federal stimulus funds and state and local government appropriations from general taxes. Heavy construction spending, adjusted for inflation, has decline from a year ago with further small declines expected over the next year.

State tax receipts appear to have stabilized at a low level during the spring but local government tax receipts, heavily property taxes, are still declining.

Other market drivers are stable but still very low. This results in essentially a no change outlook for heavy construction spending through 2011.

Key Indicators of the U.S. Market Environment — July 2010 Heavy/Engineering Construction (Driven by demographics and government finances, as well as cyclical factors)
	Year Ago	Previous Month or Qtr.	Latest		Level	Recent Trend	Impact on Const.
Heavy/Engineering
Electric power capacity utilization rate, % level (FRB)	79	80	Jun	82	Low	Steady
Airline revenue passenger miles, billions (RCD) (ann. % change)	-15.2	16.0	Jun	17.7	Average	Rising
State & local govt. capital spending, $ billions (U.S. Commerce Dept.)	348	351	Q1	337	Low	Falling
State and local government tax receipts, $ billions (U.S. Commerce Dept.)	1272	1279	Q1	1296	Low	Steady
Heavy contractor employment, 000s (U.S. Labor Dept.)	841	802	Jun	803	Low	Steady
Construction equipment shipments, $M (U.S. Census Bureau)	1721.0	2238.0	May	2362.0	Low	Rising
Abbreviations: y/y = year over year; FRB = Federal Reserve Board; RCD = Reed Construction Data Table: Reed Construction Data and Reed Construction Data - CanaData