SIC 1629
HEAVY CONSTRUCTION, NOT ELSEWHERE CLASSIFIED



This classification covers general and special trade contractors primarily engaged in the construction of heavy projects, not elsewhere classified.

NAICS Code(s)

234930 (Industrial Nonbuilding Structure Construction)

234990 (All Other Heavy Construction)

Industry Snapshot

The heavy construction business is divided into several specific categories that represent separate building and development industries. There remain, however, multiple specialty construction activities that cannot be easily classified. Consequently, this miscellaneous heavy construction industry was named to encompass and represent these specialties. This industry is composed of companies primarily engaged in the construction of heavy projects not classified elsewhere. The array of categories in this group include athletic field and golf course construction, clearing of brush and land, land drainage, canal and channel construction, chemical complex or facilities construction, dam and dike construction, hydroelectric plant and petrochemical plant construction, missile facilities construction, pier, wharf and waterway construction, pond construction, power plant construction, and railroad construction.

The structure, history, and current status of this industry is closely related to, and often overlaps, the major divisions of the overall construction industry. Therefore, this entry stresses many of the unique special-ties that are considered miscellaneous, and serves to tieup loose ends of the heavy construction market that are not addressed in other standard industrial classifications. For more information on the structure and history of this industry, see related entries in the heavy construction industry.

The U.S. construction industry overall continued to grow throughout the late 1990s, largely as a result of a strong economy, which drove building in both residential and nonresidential markets. However, by the early 2000s, as the U.S. economy weakened considerably, this trend had reversed. Based on a 2003 ENR survey of the top 400 contractors, revenues fell by 3.2 percent in 2001 and by another 2.9 percent in 2002. Estimated 2002 domestic revenues for all establishments in this classification were $174.79 billion, compared to $200.93 billion in 2001. International revenues declined by 10.9 percent to $19.6 billion in 2002.

Apart from a weak economy, factors influencing the decline in this industry were the terrorist attacks of September 11, which devastated the U.S. insurance industry, and the Enron scandal and subsequent bankruptcy, as well as various other highly publicized discoveries of corporate fraud and accounting irregularities. As the economy worsened, declining tax revenues and funding cuts prompted state and local governments to tighten their construction budgets.

Despite the troubles of the early 2000s, prospects for the near future in this industry were generally considered favorable by industry analysts and insiders. The opening of foreign markets to American construction companies created great potential for further international growth, while domestic funding for government-based initiatives was expected to increase as the economy slowly recovered. The transportation sector is expected to perform particularly well.

Organization and Structure

Because the miscellaneous heavy construction industry is actually a conglomeration of many distinct activities performed by diverse companies, there is not a formal structure by which it is characterized. Likewise, few statistics exist that provide a representative picture of the companies within the industry or the markets that they serve. Many of the firms in this industry are active in several areas, while others are highly specialized. Furthermore, it is difficult to distinguish this classification from other sectors of the overall construction industry because many of the miscellaneous activities are closely related to other markets. For instance, aqueduct construction is not part of this industry, but both canal building and waterway development are included. Similarly, subway tunnel construction is part of the industry, but highway tunnel work is not encompassed by this classification.

Most companies in this industry usually act as general contractors for specific construction projects. This means that they sign a contract with the entity for whom the job is being done and are responsible for seeing that all work pertaining to the job is accomplished. Responsibilities of general contractors include hiring and managing sub-contractors. In some cases, however, companies in this industry act merely as sub-contractors, serving as part of a team of companies working to construct a project rather than orchestrating and managing the entire job.

Although huge multinationals dominate the top 10 lists of industry leaders, most companies in this industry are quite small. According to the latest U.S. Census Bureau statistics available, 15,475 establishments were classified as Heavy Construction, n.e.c., with a total of 192,974 employees—an average of 12.5 employees per establishment, which marks a decline from the average of 19.2 in 1992. The vast majority of establishments indicated that at least 51 percent of their business was specialized; taking into consideration both the number of establishments and the size of those establishments, the most common areas of specialization included conservation and development, sewage and water treatment plants, and mass transit construction. Larger corporations may achieve specialization through divisions and subsidiaries, or through joint ventures with more specialized firms.

Industry Divisions. Many of the miscellaneous projects in the heavy construction industry are so irregular that they cannot be comfortably categorized with a significant number of other activities. For instance, removing under-water timber and extinguishing oil well fires are both relatively distinctive enterprises. On the other hand, a few broad categories exist that encompass many of the miscellaneous activities, and thus bring some order to this industry classification.

A 2003 survey of the top 400 contractors broke down as follows: 50.6 percent of 2002 revenues in the construction industry came under the general category of building, most of which does not fit into this classification. The remaining 49.4 percent was split among various special-ties, including several in this classification.

Transportation took 13.3 percent of the market, with $25.8 billion in revenues. Some of the projects included in this miscellaneous heavy construction field are subways, railroads, and canal construction, including repair work on existing projects. Nearly 400 companies specialized to some degree in mass transit construction alone.

Power-related construction had 9.7 percent of revenues, with $18.8 billion dollars. Construction projects that fall under this category include new power plants, conversion of existing power plants from oil and gas to coal, modernization of power plant buildings, and myriad modern, unconventional power plant projects, which are spurred by technological advances. With the inclusion of power and telephone lines, roughly 500 establishments specialized to some degree in this sector of the industry.

Sewage and wastewater treatment, and related projects, took 1.7 percent of the market, with $3.3 billion in revenues. Work in this category primarily entails contracts related to water and sewage treatment plant construction and renovation, including filtration and desalinization plants. Sewer and water line development is not considered part of the miscellaneous heavy construction industry. Nearly 700 establishments considered this one of their specialties.

Other water projects, such as reservoirs and dams, represented 1.6 percent of the market, with $3.0 billion in revenues. Spending on water construction remained relatively steady through the late 1990s, although it also felt the effects of the economic downturn in the early 2000s.

The "Other" category had 2.0 percent of the total market, with $3.7 billion dollars. A few of these activities include furnace construction for industrial plants, kiln construction, missile facilities development, pile driving, underwater rock removal, construction of industrial baking ovens, and development of chemical complexes and facilities. Sports and recreation facilities, such as golf courses, racing speedways, tennis courts, or ice rinks, also fall under this classification.

A category of construction that split among these and other categories was conservation. Some of the jobs included in this heavy construction industry include breakwater construction, brush clearing and cutting, land clearing, drainage project construction, dredging, earth moving (not related to building construction), flood control project development, land and sea reclamation, pond construction, and water power plant development. Over 3,000 establishments considered this their specialty to some degree; more than 2,146 specialized completely in this area.

Background and Development

Although the success of individual specialties within the industry varied widely in the 1980s and early 1990s, the industry followed the same economic pattern as the general construction market. Most commercial construction sectors boomed during the mid-1980s but became recessed in the late 1980s and early 1990s. In contrast, industrial and public construction remained comparatively stable.

The health of the miscellaneous heavy construction industry was similar to that of the overall construction industry in the mid-1990s. However, a greater proportion of these miscellaneous projects were related to public works (except military installations) and industrial activity, rather than commercial construction. Because the commercial sector was the most depressed segment of the construction industry, the market for miscellaneous projects was not as adversely affected as other construction markets by the economic downturn of the late 1980s and early 1990s.

For example, total expenditures for commercial construction plummeted about 40 percent between 1985 and 1992, falling from approximately $87 billion to $54 billion. During the same period, however, the value of all work done in the construction industry fell about 13 percent, to an annual rate of just under $410 billion by the end of 1991. Furthermore, spending in several sectors that represented disproportionately large amounts of miscellaneous construction actually increased. Spending on water supplies increased from $3.5 billion in 1989 to about $4.8 billion in 1992. Similarly, spending on all miscellaneous private structures increased from about $2.3 billion in 1989 to about $2.9 billion during 1992.

Despite the industry's resilience, most contractors that offered miscellaneous heavy construction services were still striving to recover from unfavorable market conditions which began in the late 1980s and lingered into the mid-1990s. Several factors contributed to these conditions: increased competition from global competitors, as well as from domestic contractors that were fleeing from depressed market segments; lower profit margins caused by increased competition; a weak economy, which was resulting in a general reduction in the demand for new construction and was generating fewer tax dollars for public improvement projects, and; a lack of capital available to finance new projects.

Conservation. In 1992 the value of new conservation construction amounted to approximately $4.5 billion, reflecting a growth of 5 percent. This figure excluded repair work on existing facilities, but included some work classified in other construction industries.

In 1993, federal expenditures accounted for more than 80 percent of the activity in the conservation category and were administered by three federal agencies: The Army Corps of Engineers, the Bureau of Reclamation, and the Tennessee Valley Authority (TVA). The Army Corps of Engineers' hydropower facilities accounted for 30 percent of the U.S. power generating capacity in 1993.

Although the last of the Bureau of Land Reclamation's "mega-dams" were put into place in Arizona and Utah in 1993, several new smaller projects were planned. The Army Corps of Engineers was planning significant rehabilitation expenditures for major repairs of its dams, many of which were built in the 1940s and 1950s. Other conservation construction spending was slated by the TVA, which launched a $100-million redevelopment program in 1991 for dam repairs. Furthermore, more than $1 billion of spending was earmarked for flood control projects in such states as California and New Jersey.

One of the more ambitious conservation projects proposed in 1993 was an effluent diversion plan in the San Francisco Bay area. This $3-billion proposal, developed by the city's Department of Public Works, called for treating, storing, and delivering municipal wastewater to farmers nearly 50 miles away. Part of the plan proposed spending an additional $200 million to construct a seven-mile tunnel across the city that would transport effluence to the ocean.

Utilities. Although the inflation-adjusted value of electric utility construction (excluding water power) dipped by 47 percent during the 1980s, the decline appeared to have leveled off in the early 1990s. The market for power plant retrofits, which increase plant efficiency or convert plants to run on different fuels, was especially promising. In fact, expenditures for the maintenance and repair of electric utilities were almost as great as new utility construction spending in the mid-1990s. This phenomenon was due in part to increased regulatory requirements and financial risks associated with building new utility facilities.

Transportation. Growth in mass transit construction activity, much of which falls into the miscellaneous heavy construction industry, received a significant boost by the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991. ISTEA was created to generate as much as $90 billion in additional funds for new mass transit projects between 1992 and 1997. ISTEA was also responsible for much of the projected 21 percent growth in the Department of Transportation's mass transit spending for 1994. The Federal Highway Administration recognized that economic and environmental constraints of the 1990s would make it impossible to build the 34,000 lane miles needed to meet U.S. traffic demand, and consequently focused on boosting rail industry prospects.

Although traditional railroad construction, which is also part of the industry, was relatively stagnant in the early 1990s, there was growth in the rehabilitation of commuter and intercity tracks. For instance, Amtrak was electrifying a line between New Haven and Boston under a $300-million construction contract. At least $500 million of additional spending would improve other areas of Amtrak's Northeast corridor. Additionally, Los Angeles was continuing construction of a multi-billion dollar, 400-mile regional rail system in 1993.

Using trains for airport transportation was a growing trend in the late 1990s: as of 1998, 166 cities worldwide either had or were planning or building such systems. An expansion project underway for San Francisco International Airport carried a price tag of $1.1 billion; a new system for JFK in New York was projected to cost $1.5 billion. Parsons Brinckerhoff was the general engineering consultant for the San Francisco project, while the JFK project was a joint venture of Bombardier Transportation, Skanska USA, STV, Inc., Alcatel Canada, and Perini Corp.

Traditional rail was on the rise in the late 1990s as well, for both passengers and freight, as infrastructure investments reached record highs. Capital spending by "Class I" railroads was over $6.26 billion in 1997, as railroads increased capacity to compete directly with the trucking industry. Several railroad companies announced plans in 1998 to spend even more: Union Pacific planned to spend $1.4 billion, CSX Corp. announced nearly $320 million in construction projects, and Dakota, Minnesota & Eastern Railroad was seeking federal approval for a $1.2 billion expansion.

Water and Sewage. Spending on new water and sewage projects in 1992 was approximately $13.4 billion, up from $11.7 billion in 1989. Much of that amount, however, was spent on activities such as pipeline and manhole construction, which are classified in other industries.

Most of the growth in this division of the industry was dependent on increased federal spending on municipal water supply construction allocated by The Safe Water Drinking Act and The Water Resources Act. For instance, in 1993 the Environmental Protection Agency (EPA) estimated that it would take $110.6 billion over 20 years to deal with U.S. water pollution.

Aside from wastewater treatment and water supply facilities, filtration was a growing market, as the federal government forced localities to improve their water supplies. In 1992, San Francisco was ordered to initiate a $500-million surface water filtration program. The city of New York was facing a potential $5 billion investment in filtration systems. Other domestic opportunities for water and sewage facilities contractors existed in the West and Southwest, where disappearing or contaminated water supplies were forcing many cities to resort to desalinization to supplement drinking water supplies.

In general, increasing concerns about the environment were a boon for firms specializing in these areas of the industry. According to a 1999 report in ENR, "municipalities face the twin challenges of expanding populations and ever-stricter state and federal standards for water and wastewater treatment." The top 200 firms focusing on environmental engineering earned $26.7 billion in revenue in 1998, marking an 11 percent increase from the year before. Forty-seven percent of that revenue came from water, wastewater, and solid waste projects. The potential for profits from this sector spurred heavy competition among contractors, with many larger firms acquiring smaller niche businesses to expand their footprint in this area.

Current Conditions

The top 400 construction contractors saw domestic revenues decline by 2.9 percent in 2002 as the value of new domestic contracts declined 10.9 percent to $172.8 billion. However, while international revenues declined 10.9 percent, the value of new international contracts rose 7 percent to $24.4 billion. Some industry analysts believe that emerging international markets will offer the most growth potential to U.S. contractors through the first decade of the twenty-first century.

Conservation and Water. The Water Resources Development Act of 1999 (WRDA) was expected to make available over $4.3 billion dollars for 45 major conservation projects, including flood control and dredging. That federal money was expected to be matched by local money, bringing the total to $6.3 billion. One goal of the bill was to develop nonstructural methods of flood control, including the restoration of wetlands and floodplains. "Challenge 21," as the project was called, was slated to receive $200 million of the federal WRDA money. Major dredging projects included Oakland Harbor (receiving $128.1 in federal money) and Savannah Harbor ($145.2 million); beach-rebuilding projects were

SIC 1629 Heavy Construction, Not Elsewhere Classified

planned for mid-Atlantic states including Delaware and New Jersey. Congressional members also mentioned the possibility of a similar act in the year 2000, which might include significant funding for the restoration of the Florida Everglades.

In late 1999, the House considered reauthorizing the Clean Water Sate Revolving Load Fund program, which expired in 1994. A bill co-sponsored by Rep. Sue Kelly (R-N.Y.) and Rep. Ellen Tauscher (D-Calif.) would fund the program at $3 billion per year for five years. Part of that money would be earmarked for smaller projects in less populated areas.

Transportation. The passage of the Transportation Equity Act for the 21st Century (TEA-21) in year 1998 was expected to boost this sector of the heavy construction industry through the year 2005. The Act, which was the largest public works measure ever authorized by Congress, set aside $217 billion for transportation construction, at an average of $26.2 billion per year over five years. Important areas for growth in transportation construction included light rail projects—representing at least 10 percent of TEA-21 projects—and airport construction. Cities considering building commuter lines included Cleveland, Minneapolis-St. Paul, Madison, Seattle, and Salt Lake City. Areas with existing commuter rail—including Long Island, Miami, Boston, and Chicago—were also making plans to extend services. In March of 2004, the House Transportation and Infrastructure Committee approved a $275 billion version of TEA-21, dubbed the Transportation Equity Act—a Legacy for Users (TEA-LU). TEA-LU was drafted as a compromise between the $318-billion version of TEA approved by the U.S. Senate and the $256 billion version of TEA advanced by the Bush administration. If enacted, the bill will authorize the spending of $275 billion on transportation-related projects through 2010.

High-speed rail was another beneficiary of TEA-21 funding, with $121.5 million in earmarked funds from 1998 to 2004—plus another $1 billion to study magnetic levitation technology. High-speed rail, which travels at speeds from 150 to 300 mph, was primarily considered for areas with high population density and heavily touristed areas, including lines from Anaheim, California, to Las Vegas, Nevada; from Orlando International Airport to Disney World; between Dallas, Houston, and San Antonio; and between San Francisco, Los Angeles, and San Diego. If passed, TEA-LU will earmark $69 billion for transit projects of all kinds, including high-speed rail, through 2010.

Utilities. "Utilities and independents are building power plants again," according to a year 2000 report in Forbes. Deregulation was one of the main factors in the increase in power plant construction, especially renovating existing facilities. However, by the early 2000s, this segment of the industry proved to be one of the hardest hit. According to a May 2003 article in ENR, "The surge and then collapse of the power market has been well documented particularly in California. Starting with California's deregulation of power, then the Enron debacle, followed by the state's regulation of the industry, the market has been poor." Adding to industry woes, particularly in California, are the highly publicized financial troubles experienced by both Southern California Edison and Pacific Gas and Electric Co.

Industry Leaders

Because miscellaneous heavy construction markets are so fragmented, no companies that are engaged primarily in this industry dominate it. Although some of the largest construction companies in the world complete numerous projects within the industry, these companies are not dedicated to projects included in the miscellaneous heavy construction market. Rather, the industry is mainly composed of thousands of unique small and mid-size companies. Many of these companies specialize in a single activity, such as brush-clearing or pier construction. According to Katherine Grieder of Insurance Marketing Research, "Approximately $4.1 billion in premium, or 75 percent of the total, is in small and medium sized accounts. The average premium per account of $12,300 for small firms and $124,000 for medium sized firms makes this a much sought after area for independent agents."

Ranked by total sales (which may include projects not included in this classification), the top five companies in this industry in 2002 were Bechtel Group Inc. ($11.6 billion, which reflects a percent decline from 2001); Fluor Corp. ($8.8 billion, which reflects an 11.6 percent decline); Turner Corp. ($6.05 billion, which reflects a 3.9 percent decline); Skanska USA Building Inc. ($4.8 billion, which reflects a 3.7 percent decline); and Kellogg Brown and Root, Inc. ($3.7 billion).

Rankings within particular classifications give a clearer picture of who leads the industry in each sector. Light rail leaders include Skanska USA, Peter Kiewit Sons', and Raytheon Engineers and Constructors. Power plants leaders include Bechtel Group Inc., Black & Veatch, and Raytheon Engineers and Constructors. Leading the list for wastewater treatment are Skanska USA Inc., TIC-The Industrial Company, and Danis Environmental Industries Inc., although Danis was expected to shutter operations by the end of 2004.

Workforce

Although employment in the entire construction industry dropped from over 5 million to less than 4.5 million during the recession of the late 1980s and early 1990s, the miscellaneous heavy construction industry fared better than most other segments of the construction market. In fact, certain areas of this industry were realizing significant employment growth in the 1990s. Most growth was expected to occur in sectors that benefitted from increased federal spending or from federal mandates requiring businesses and localities to invest in construction. By 2002, despite a waning economy, employment in construction had recovered to 6.7 million workers, due in large part to booming residential construction, which was far outstripping miscellaneous heavy construction by then.

Significant growth was expected to occur in miscellaneous activities related to environmental construction such as wastewater treatment, retrofits of energy producing facilities that were polluting the atmosphere, and land reclamation. When these sectors bottomed out in the early 2000s, however, analysts began pointing to international markets, where the largest growth was expected to occur.

Job positions in the miscellaneous heavy construction industry were similar to those available in related heavy construction industries. Jobs in construction management, skilled trade work, physical labor, equipment operation, and sales were representative of the overall construction industry. Growth was most likely to occur in positions that required technical knowledge, as more firms were relying on advanced technology to reduce costs and become more competitive in the crowded market.

A multitude of niche opportunities existed in miscellaneous projects, as well. For instance, high-paying jobs in weapons disarmament and battlefield reclamation were on the rise as foreign governments increasingly sought U.S. expertise in removing and detonating live explosives that remained after armed conflicts. Another growing field was removal of underground storage tanks, many of which were leaking hazardous residues and were contaminating surrounding soil and water tables.

America and the World

Through the early 2000s, the United States was the world's largest construction market, surpassing economically depressed Japan, which was the largest market in the mid-1990s. China was a distant third. Other markets expecting to see growth rates of 8 percent or higher in the early 2000s included Italy, Spain, Australia, Mexico, India, and Switzerland. The market with the highest predicted growth was Korea. Only Brazil was expected to show a slight decline in growth.

Based on growth in the early 1990s, industry watchers had anticipated an even larger Asian market, but the collapse of several Asian economies in the late 1990s changed the forecast. Particularly for U.S. construction firms on the West Coast, soft spending in former growth leaders Japan and Korea affected all areas of the construction industry. Bart Eberwien, vice president of Hoffman Construction Co., told ENR "Even for a bunch of concrete pourers like us, it's a worldwide economy. Once the world's second-largest economy [Japan] went into a nosedive, it affected all of our customers." Temporary instability caused by the introduction of the Euro (the European Union's common currency) slowed the growth of markets in Europe as well.

Decreased restrictions on foreign involvement and increased privatization in public works projects created opportunities for U.S. construction firms. In February 2000, India announced plans to build the world's largest hydroelectric power plant, at an estimated cost of $23 billion (U.S.). The plant was planned to have a capacity of 21,000 megawatts, and to be built on the river Brahmaputra, in northeast India. The National Hydroelectric Power Corporation encouraged U.S. construction companies to pursue contract opportunities on the project through the U.S.-Asia Environmental Partnership.

Contracts in light rail increased overseas as well as domestically. China announced plans to start an extensive light rail development in 2001, including a subway line in the Northeastern city of Shenyang, and aboveground commuter rail in Changchun and Harbin. Competition for the projects was expected to be intense; only 30 percent of total project value was open to foreign participation. U.S. companies with investments in Chinese concerns, however, would be considered domestic, giving heavily globalized companies a significant advantage.

Environmental and Utility Opportunities. As in U.S. markets, the greatest area of growth for miscellaneous contractors overseas was in the area of environmental construction. American specialty contractors have dominated this industry segment. For example, U.S. firms took the lead in extinguishing more than 900 oil well blazes in Kuwait following the Gulf War of 1991. Growing markets in waste cleanup and water treatment abroad were likely to lure more U.S. companies overseas. Another potential area for international growth was in flood control, as several Asian nations announced plans for major flood control efforts in the second half of 1999. Clean-up in Iraq following U.S. attacks there in 2003 was also expected to require the work of U.S. contractors.

A characteristic of many foreign environmental projects in the industry is immensity. The average overseas utility project in the late 1990s and early 2000s was 4.5 times larger than the typical U.S. project. An example of one of these massive projects was in progress in Pakistan in the mid-1990s. This multi-billion-dollar plan would eventually create an entirely new river system that would allow more efficient and environmentally safe irrigation. The master plan called for the construction of over 2,500 miles of channels, drains, and irrigation canals. In addition to irrigating soil, the system would carry 2,700 cubic feet of refuse water per second to the Arabian Sea. More Western firms were expected to receive contracts for the project as the amount of work exceeded the capacity of Pakistan's construction industry.

The construction of the Katse Dam and two massive accompanying diversion tunnels in Africa was another example of projects that were increasing the foreign market for U.S. firms in the industry. The project, which started in the tiny mountain country of Lesotho in 1991, will carry water and generate power for the Republic of South Africa. The $5-billion effort, which will provide 29 years worth of construction activity, will result in the continent's tallest dam.

In 1999, Bechtel, already a leader in international construction, announced expansion of its relationship with Royal Dutch/Shell Group, an alliance expected to enhance their competitiveness in seeking contracts to build power plants abroad. The joint venture is known as Intergen, based in Houston. One of its biggest projects as of 1999 was China's largest private coal-fired power plant, built to provide power for most of southern China. The global trend toward the privatization of power plants previously run by national governments—particularly in Latin America and Asia—drove the market for power plant construction up; strategic alliances with key players in foreign markets became essential for U.S. companies like Bechtel to compete.

Research and Technology

An area of growth that has been of particular interest to specialty contractors is alternative energy production facilities. For instance, the first compressed air energy storage unit was completed in 1991. In addition, Hawaii's National Energy Laboratory launched construction of an ocean thermal energy conversion unit in 1992, which was designed to generate electricity by exploiting temperature variations of seawater at different depths.

Other advances in technology offered the potential for growth in wind power plant construction, development of large-scale solar-thermal facilities, and construction of onsite "fuel cell" generation facilities. Fuel cell power plants employ clean electrochemical reactions that generate the useful by-products of steam and heat. New waste-to-energy projects were also beginning to increase, following a lull in the early 1990s. Delaware, for example, unveiled a plan for a $275 million, 2,400-ton-a-day plant that would burn virtually all the state's combustible, non-recyclable waste.

U.S. dollars began moving from defense to private industry, particularly environmental industries, in the early 1990s. Nevertheless, U.S. construction companies lagged behind many other industrialized nations in the percentage of revenues invested in research and technology in the mid-1990s. In sharp contrast, Japan's construction contractors spent about $100 million on research in 1992, almost twice as much as their U.S. counterparts. Japanese firms also were forming more joint research ventures between government agencies and other industries. As a result, Japanese miscellaneous heavy construction contractors were setting the pace in three critical growth areas: mass transit, automation, and tunneling. For instance, Japan had already developed an automated rail setter by the mid-1990s, which could lay rail for subway systems. Furthermore, it was nearing completion of an automated tunneling system.

Despite Japanese advances, U.S. firms were breaking new ground and innovating at a record pace, particularly in wastewater and water treatment. For instance, the National Environmental Technology Applications Corp. (NETAC) in Pittsburgh was working with contractors to use X-ray fluorescence technology to analyze soils and sludge for heavy metals. In another breakthrough, the company designed a portable system for screening soil and water samples for volatile organic compounds. NETAC also had developed a biotreatment system that used proprietary microbes and enzymes to cleanse wastewater.

American construction firms were also leading the global industry in development of new software that served miscellaneous heavy construction firms. One of the newest software breakthroughs was 3-D computer modeling. This process allowed construction managers and job site engineers to construct projects on their computers, piece by piece, before implementing the construction on the ground, thereby reducing completion time and costs. This 3-D modeling technology had already been used in the construction of cogeneration plants, where animated diagrams showed exactly how the projects would come together and how they would later function. In the early 2000s, U.S. researchers continued working on integrating laser imaging, global positioning systems, and sensor technology in an effort to increase automation on construction sites.

In addition to increasing research expenditures, the U.S. government was trying to increase industry awareness of new research and technology being developed. Northwestern University, with an $18-million grant made possible by ISTEA, was striving toward this goal through development of the Infrastructure Technology Institute. The purpose of the Institute was to transfer knowledge from research to practical applications in the field.

Further Reading

"China: Light Rail Transportation Projects." International Market Insight Trade Inquiries, 20 January 2000.

Fisher, Daniel. "Industry Buzz." Forbes, 10 January 2000.

"India: World's Largest Hydroelectric Power Plant to Be Built." International Market Insight Reports, 4 February 2000.

"Reauthorizing TEA-21." ENR, 25 March 2004.

"Sensors Propel Automation Advances." ENR, 7 October 2002.

Tulacz, Gary J. "The Top 400 Contractors—Broad Downturn Touches Most." ENR, 19 May 2003.



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