Bridge, Tunnel, and Elevated Highway Construction
SIC 1622
NAICS 237310
This industry includes general contractors who build bridges, viaducts, elevated highways, and tunnels for pedestrians, vehicles, and trains (excluding subways).
The market for bridge, tunnel, and elevated highway construction has become increasingly globalized since the 1980s. The dominant players in the industry—companies from North America, Western Europe, and Japan—have looked beyond these mature markets to seek out the opportunities for growth that are available in developing economies. However, funding for infrastructure construction projects such as bridges, tunnels, and elevated highways is quite dependent upon the economic health of a country, so economic weakness within these developing economies can cause the monetary resources in these markets to dry up or can shift resources away from infrastructure construction.
Even in mature and stable economies, infrastructure funding can be difficult to come by. Funding comes largely from public coffers, and many other concerns compete for these resources. Additionally, since the 1990s governments have been under pressure to balance their budgets, which emphasizes the finite nature of spending levels for infrastructure.
While developing economies need additional infrastructure in order to sustain their growth, the United States is increasingly faced with the need to repair or replace existing bridges, tunnels, and elevated highways that are aged and deteriorating or inadequate to carry the current volume of traffic. With such needs and demands for these infrastructure projects, countered by the limited nature of public funding, modest growth is expected for the industry worldwide. Though Asia's late 1990s economic crisis produced a chilling effect on heavy construction on much of that continent in the early 2000s, a significant exception was China, where astronomical development spurred the planning and execution of several monumental civil engineering projects.
Although the North American industry experienced a brief upswing in 1999 and 2000, by 2001 and early 2002, it had again declined. The brief rebound followed a short period of economic prosperity and an increase in federal funding in the United States. The renewal of the Transportation Efficiency Act, TEA-21, in August 1998 invested federal money in transportation infrastructure. However, as the economy lagged in the latter half of 2000, available funds decreased. By 2003, however, conditions had improved. In 2001, U.S. bridge and tunnel contracts rose to US$939.6 billion, from US$855.5 billion in 2000, and US$641.4 billion in 1999. In 2003 the American Road & Transportation Builders Association projected growth of 4.2 percent for the industry.
Concurrently, bridges and other infrastructure aged rapidly due to increasing traffic and speeds and heavier vehicles. A 2003 national inventory of U.S. bridges estimated some 22.3 percent of the country's 286,195 interstate and state bridges had become structurally or functionally obsolete.
As with general contractors in other construction sectors, companies involved in bridge, tunnel, and elevated highway construction bid on potential projects or "jobs" based on estimates of overhead costs, desired profit margin, and estimated time necessary to complete the job. Winning bidders are responsible for managing the construction project, although they may subcontract some or all of the project to other companies. Consequently, in some instances the winning bidders may be companies that are known primarily as engineering firms rather than conventional construction contractors. (See also Engineering Services.)
Contracts to assume responsibility for construction of a bridge or tunnel (or most other types of construction) can take different forms. In cost-reimbursement contracts, builders are paid for reasonable costs incurred during the life of the project. Fixed-price contracts, on the other hand, require contractors to absorb cost overruns themselves. By the early 2000s, incentive-based contracts that reward builders for timeliness and quality of construction had become increasingly commonplace.
According to a report in the U.S. Industry & Trade Outlook, across the construction industry in general, U.S. companies that win jobs overseas tend to use local labor through their foreign affiliates to carry out the work. Hence, U.S. construction firms generally export only their management and engineering skills, not their actual construction services.
Government budgets for new construction or renovation of existing structures are of great importance to the industry's vitality, as government contracts from around the world account for the vast majority of industry revenue. Government involvement in the construction process varies from country to country. In the United States, for instance, federal or state agencies are often involved in the execution of projects, as well as the funding. In less developed countries, such as those in Africa, parts of Asia, or Eastern Europe, funding sources often include the World Bank and regional development banks.
Historic advances in this industry's development have resulted in some of the world's most notable architectural achievements. Led by European and U.S. builders who capitalized on the development of steel and other technological advances, bridge and tunnel construction has been characterized over the years by continuous improvement in design and execution. By building on the work of previous generations of architects, engineers, and builders, industry participants continue to devise ways to improve engineering and construction methods, as well as construction materials.
The early nineteenth century featured the introduction of several revolutionary bridge designs. In 1822 construction of the world's first iron railroad bridge was completed. It was followed three years later by the opening of the world's first wire suspension bridge in France. The first bridge of that type in the United States was opened in 1842 near Philadelphia, Pennsylvania. That bridge—25 feet wide and 358 feet long, with five wire cables on either side—cost US$35,000 to build. In 1845 the first wire cable suspension aqueduct bridge was opened over the Allegheny River at Pittsburgh, Pennsylvania. In 1849 the B&O Railroad bridge, which crossed the Ohio River and spanned 1,000 feet, became the world's longest bridge. By 1855 trains were able to cross a wire cable bridge that spanned Niagara Gorge between Canada and the United States.
Engineering and construction innovations continued through the latter part of the nineteenth century. The Brooklyn Bridge, the world's first steel-wire suspension bridge, opened in 1883 in New York City. Tunnel designs improved during this period as well. A railroad line completed in 1867 extended from Austria to Italy and included more than 20 tunnels to negotiate passage through the forbidding Brenner Pass. In the latter part of the nineteenth century much of the construction in the tunnel and bridge building industry centered on movable bridges that could accommodate river navigation. Numerous vertical-lift and swing-span bridges were built during the 1890s, which also featured the introduction of reinforced concrete bridges.
The industry continued to grow as the twentieth century began, although U.S. builders, long among the world leaders in bridge and tunnel construction, saw their fortunes sag immediately after the conclusion of World War I as labor strife and other problems diminished new business. Meanwhile, in Europe it was necessary to rebuild after the war but some European economies could not afford new construction given the high inflation and various social problems of this period.
The Detroit-Windsor Tunnel opened in 1930. The tunnel, which runs under the Detroit River and connects the United States and Canada, was built of prefabricated tubes floated over a trench and laid out in sections...
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