As we enter 2013, uncertainty exists in the overall economy that has been sputtering in stops and starts since 2008, as well as a volatile political atmosphere that is welcoming a new congress. Of course, with the fiscal cliffî dominating headlines around the beginning of the new year, increased revenues and funding for underground infrastructure from government sources seem unlikely. At the same time, however, aging infrastructure, increasing population, water supply shortages, and sustainability and green infrastructure initiatives are keeping demand for tunnels and underground infrastructure high.
To help get a better understanding of what to expect, we invited a mix of tunneling experts from across North America to share their insights on the market and how they see the future. The participants are:
– Lester Bradshaw, President, Bradshaw Construction Corp.
-David Caiden, Principal, Arup
-David Egger, Senior Vice President/Director-Heavy Civil,
-Black & Veatch
-Lok Home, President, The Robbins Company
-Colin Lawrence, Tunnel Practice Leader – North America,
-Hatch Mott MacDonald
-Matt Pope, Vice President, Mining Equipment Ltd.
-Derek Zoldy, Associate Vice President, Aecom
What is your overall assessment of the North American tunneling industry as we enter the new year? Is the market growing? Stagnant? Shrinking? Why?
Bradshaw: The North American tunneling industry continues to be stagnant at best in the small- to medium-size market for two reasons. First and foremost is the massive federal deficit, which either directly or indirectly affects state and local infrastructure spending. The second reason is the lack of demand for new infrastructure due mostly to the continuing depressed housing market.
Caiden: So far as I can tell we are seeing a steady growth. Yes, there have been impacts from the economic situation and yes some of these have been profound and regionally damaging. For example, the cancellation of the Trans Hudson Express (or ARC project) by N.J. Governor Chris Christie in 2010 has had and will continue to have a debilitating impact on economic growth in the Tri-state for the foreseeable future. But this has to be seen in the context of the overall trend. Smoothing out everything happening in the whole of North America I believe the net trend is still growth. Egger: The market for tunneling is solid, strong, and growing ñ although perhaps not at the rate experienced over the past five to 10 years due to the EPAís policy regarding integrated approaches to combined sewer and sanitary sewer overflow. Numerous utilizes are planning new tunnels for flood control, wet weather systems and new water supply development projects to re
Lawrence: I think that there is a lot of uncertainty in the market right now and it differs according to geographic and market areas. I see a recent upturn in new work, but mainly on the small- to medium-size projects. In other areas there appears to be a stagnation developing. The industry is probably experiencing symptoms from the economic downturn and the dynamic political forces that influence funding of tunneling projects. Our crystal ball remains hopeful that things will continue to recover and lift the tunneling markets across the continent.spond to water scarcity. Our tracking of CSO projects with tunnel components leads us to believe that over the next decade the number of CSO tunnel construction contracts will rise.
Home: I think itís pretty stagnant, and that is because of the political situation in the United States. It is and is going to be difficult to get new funds for large infrastructure projects. I donít see any big breakthroughs coming soon in terms of the availability of funds for large projects. It would be nice to see some of the large proposed projects move forward, such as the Delta project in Sacramento and high-speed rail in Southern California. Both require lots of TBMs, but we are not optimistic that these will proceed any time soon.
Pope: I definitely do not think the market is growing. Although there seem to be many large ìmegaî projects in various stages of design, there seems to be many delays getting them into construction. Overall, I would have to say the market is in decline for the past couple years. I believe funding is the core reason for the slowdown. We are just short of money and prioritizing projects becomes increasingly critical. Projects that are not essential get cut.
Zoldy: I think few would disagree that North Americaís underground infrastructure market is currently underfunded. Whether constructing new tunnels for heavy and light rail, roads, raw water supply, wet weather diversion or wastewater or operating, maintaining and repairing existing tunnels, access shafts, pump stations and drop structures, investments are needed on a significant scale.
That being said, it remains to be seen whether the current economic slowdown particularly relevant in the United States will rebound and result in better times for the underground infrastructure industry. Federal governments in the United States and Canada continue to seek funding solutions to invest in their planned underground infrastructure projects. The initial signs are positive with the federal governments of Canada and the United States seemingly prepared to increase the levels of funding available through many different delivery vehicles, including P3.
What effect have the general economic conditions had on the tunneling market?
Bradshaw: Other than energy-rich states, the economic conditions have caused a depression (30-40 percent drop in prices and contract volume) in the tunneling market. Bid prices are coming in extraordinarily low. Some contractorís claim they are no longer bidding their equipment costs just to take work and keep their crews busy. Since Europe has also been in a severe financial downturn, European tunneling contractors have invaded the United States, putting extreme pressures on bid prices of the large tunnel projects.
Caiden: So far as the worldwide market goes the story is the same. Look at the industry growth we have seen in the past 20 or 30 years. The rate of increase in miles of tunnels being constructed each year is creating a steep slope on the long-term graph. Yes, the general economic conditions have caused a lessening to the slope but the trend is still upward. Thatís why all players are having trouble staffing up their jobs.
Egger: Many of tunnels for wastewater have been driven by combined sewer overflow and sanitary sewer overflow mitigation projects (wet weather management). Because these projects are driven by environmental regulators, the tunnel market has not been as impacted by the economy as other major engineering/construction projects. However, owners are still looking to defer spending to minimize impacts to rates where possible.
Home: Fortunately the tunneling market hasnít been hurt as much as other industries. We still have a reasonably good market in the United States and a healthy market internationally. Tunneling is less vulnerable than the general construction market.
Lawrence: As a lot of water/wastewater tunnels are commonly driven by funded mandates there has been less impact from the general economic conditions compared with other areas of tunneling such as large transportation underground projects.
Pope: There is no question that our business as an equipment supplier to tunnel contractors is down. Not only are there fewer projects, the competition is greater as well. Everyone is hungry. That said, there are still tunneling projects out there and we are still building equipment. Itís just not as good as it has been.
Zoldy: Taking into account the policies of the Obama administration since 2009 and the effects of the ìBuild Canada Plan,î I expect to see 2013 to have a slow start, and recover by the end of the year with some exciting projects getting under way and new phases to existing projects commencing so long as funding continues to be supported for the underground construction industry initiatives planned.
I see more challenges than opportunities for governments and private sectors who need to seek funding approvals from government stakeholders and rate-payers. Private capital funds and equity firms interested in P3 projects may create additional challenges for owners and operators to come up with the winning formula to proceed with projects. That being said, the Ottawa LRT project is moving forward with ACS/Dragados.
European economies in fiscal distress are making efforts to improve the business climate, which will have a positive impact in North America.
This may create relief for North American programs that have experienced delays in 2011 and 2012. Generally, part of the solution in high-debt countries may be the recovery of economic growth, and there is recognition that creating an environment for the tunneling businesses is critical to this goal.
What opportunities exist in the market? Is now a good time to be in the tunnel industry? Why/why not?
Bradshaw: There are very few opportunities in the tunneling market at this time except for design-build team leaders or in privately financed work where price is not the only factor considered in determining the contractor. The traditional design-bid-build tunnel market place is simply dog-eat-dog and will remain so for the indefinite future at all levels of the marketplace. There also seems to be no new technological innovations to use to increase the size of the tunneling market.
Caiden: Yes, it has to be good because of the overall volume. With the world population moving more and more to cities together with the squeeze on natural resources and push for sustainable solutions the demand for tunnels must continue rising.
Egger: It is a good time to provide tunneling services because of increasing urbanization, growing acceptance of tunneling approaches, the introduction of new tunneling technologies, and the significant number of consent decrees between wastewater utilities and environmental regulators.
Home: There are lots of opportunities in the industry and it is a good time, despite the market in the United States, to be in tunneling. Internationally it is still very good. China is still spending a lot on infrastructure, and that is true of other growing economies in the Asia-Pacific area as well. In the global mining industry, we are seeing an uptick in the use of TBMs. In general, good potential lies ahead for tunneling because it is an environmentally friendly method of construction. Sewer, subway and hydro projects are all considered environmentally friendly and the world is heading toward such solutions for global warming and urbanization. This trend alone provides a healthy outlook for the future of tunneling.
Lawrence: Tunneling remains a high-risk specialist industry and should not be viewed as a commodity/opportunity to jump into without the requisite specialist skills and proven experience. Firms that are already well established in tunneling and possess such skills are in the best position to serve a challenging and competitive market in the long term.
Pope: This is a tougher question. Weíre in the tunneling equipment business and we have been for a long time. It is not as if we can switch horses because there are better opportunities in say, alternative energy. This is our business and we are in it for the long haul. Weíll make the most of it. Weíre in a tougher spot at the moment but long term we need tunnels, we need to improve our infrastructure. But we need to get our fiscal house in order for it to thrive again.
Zoldy: The tunnel opportunities are soft heading into the early part of 2013, however it is still a good time to be in the tunnel industry, whether it is small capital projects or major infrastructure programs. California has a number of programs that will be coming on line in 2013 with significant capital investments needed. New York is going through some challenging times with water infrastructure repairs and other major cities will be initiating spending to replace existing linear water, wastewater and transit infrastructure.
In Canada, there is growing calls for increased investment in transportation related investment at all levels of governmentómunicipal, provincial and federal. Investment will focus on projects of both local and national importance with new road construction being limited to the major urban areas.
There is a strong appetite for alternative funding and development models such as P3 with several transit projects being developed in Ontario, Quebec, Alberta and British Columbia. Infrastructure Ontario in particular is looking at future opportunities with MetroLinx in the Greater Toronto area for the future.
Institutional investors, such as pension funds, are becoming leaders in the infrastructure asset market and we will see their interest well into 2013.
What do YOU see as the biggest challenges facing the market? Funding? Finding qualified people to do the work? Legal/regulatory? What forces may limit the amount of tunnel work despite the demand?
Bradshaw: Funding without a doubt is the critical factor as most tunnel work is publicly funded. So until housing demand returns, tax revenues for all level of governments rebound and political leaders again show the willingness to invest in clean streams and drinking water, the tunneling industry will continue to stagnate especially at the mid- and small-market level.
Caiden: All of these things are active constraints. For the United States, the reliance on direct government funding for major infrastructure will be falling away as more and more states pass legislation permitting public-private partnerships (PPPs). But just allowing PPP without enacting other accompanying enabling legislation is not going to give rise to any step changes. For example, I am always talking about having city legislation that defines real estate ownership to a fixed depth below ground (and have suggested 100 ft or 30 m as the suitable limit). So there would be no need to acquire property where tunnels passed below the ownership depth boundary (this should in no way impact on a land ownerís ìbeneficial useî rights when objecting to planned schemes). Similarly, many cities seem to lack enabling powers for their agencies so that NIMBY objectors suck up vast sums of money and time before infrastructure schemes can get approved. So yes, I would say some work from legislators to give more power to, for example, a rail service provider could do wonders to not only get projects rolling but get them built cheaper too.
Egger: The lack of a comprehensive public policy to fund infrastructure is an impediment. Which generation pays for the backbone infrastructure that is needed for truly great cities and quality of life? The desire or inability of owners to fund large capital projects continues to be a significant hurdle for bringing tunnels to the marketplace. Unfortunately, the majority of water tunneling projects that have been delayed will still be required in the future to meet regulatory obligations and public needs.
Home: Here in the United States it is funding that is the biggest challenge, and that is even more true in Europe. Funding is getting more difficult. Finding qualified people to work in the industry can be a problem, but at the same time our industry is getting more aware of the need for training and more accepting of other professionals converting into our industry. These professionals come in as mechanical engineers from civil construction, mining engineering, etc., and our industry is adapting to this.
Lawrence: Owners obtaining project funding during an economic downturn is one of the biggest challenges for the immediate future. Politicians can be a limiting force at times!
Pope: I believe funding and escalating costs are the core factors challenging our current market. It costs a lot more today on a percentage of the whole project cost to get a tunnel job ready to begin actual construction, get a contractor on site and working. The number of billion-dollar jobs is just astonishing. We throw the ëBí word around without a second thought. Costs at the construction level are also higher than they need to be because of various reasons, over-zealous unions, environmental requirements, legal and regulatory requirements.
Zoldy: The biggest challenge is that there is significant need for investment in highway, energy, water and wastewater infrastructure in the United States, not only to increase new capacity, but also to bring the systems up to an appropriate condition for the demands of users. Existing funding mechanisms, which primarily consist of user fees and taxes, have been insufficient to cover the infrastructure funding needs. That being said, the Obama administration has taken steps of placing infrastructure investment in a priority position.
I believe there is a shortage of skilled labor in tunnel construction industry. There is a need to see the opportunities go from ìbooked to burnî to keep the labor pool active and engaged.
What areas of the business can be improved to help the market succeed long term? Contracting practices? Specifications? PPPs? Education and training? Research?
Bradshaw: Owners need to be encouraged to see how costly their current ìrun to failureî infrastructure management practices are. This ìpatch it and hope it holdsî mentality is an extremely short-term view and will be even costlier going forward. Tunneling is very expensive compared to most any other type of construction much and therefore requires a long-term approach. This is the antithesis of the way I see many owners managing their infrastructure assets today. So we must help them see that living for today may balance their budget but bankrupt them in the long run. Besides, owners who build today are getting extremely discounted prices on 100-year investments that will benefit their rate-payers extraordinarily. Consider the CSO tunnel in Indianapolis which bid for $180 million and was $100 million under the ownerís budget. Now that is extraordinary savings and incredible long-term benefits to the rate-payers of Indianapolis. And I do not believe it was the result of a bad engineering cost estimate but rather intense competition from a slowing market place and foreign competition invasion.
Caiden: Education and training are obviously essential to the mix and that is why training programs are springing up around the world (usually as a spin-off from the big projects and the realization that the people resources are just going to be too thin). I also think that current forms of contract need a complete face-lift. We are using dated contract styles in the United States with old-fashioned language that confuses. For example, the standard style of construction contract in the United Kingdom (created by the Institution of Civil Engineers and now endorsed by government) is the ìNECî (meaning New Engineering Contract). This provides a formalized system that guides the drafting of documents and administration of contracts. It legally defines the responsibilities of parties without all the gobbledygook so things can be plainly understood. There are six families of contract to select from in the NEC:
Option A: Priced contract with activity schedule
Option B: Priced contract with bill of quantities
Option C: Target contract with activity schedule
Option D: Target contract with bill of quantities
Option E: Cost-reimbursable contract
Option F: Management contract.
Some other English-speaking countries are adopting the NEC as the standard and I think it would be great if it (or a version of it) could be adopted in North America. Also, we have way too many contracts here which end up in the courts. If we could somehow reduce the adversarial nature of tunnel contracts and get people focused as a project team we would have more successful projects and take the fear away from tunneled solutions. The NEC also provides a format for a partnering agreement.
Finally, there is a desperate need for someone to unzip the ludicrous bonding requirements that we have in the United States. To the best of my knowledge no other country has the full ìdoubleî bonding that federal projects require. A bond for some percentage of the contract value would serve the required purpose.
Egger: We need to change how we promote the benefits we bring to the public with tunneling construction. It is by definition a sustainable solution over generations. Education provides the greatest improvement opportunity for long-term market success ñ both in terms of providing educational opportunities to encourage young engineers to enter this field and in terms of educating the public and utility owners about advances and recent successes within the underground market. Promoting our industry better through improved educational opportunities will not only ensure we will have young, qualified engineers to sustain a healthy growth into the future but also will help break down some of the standard misconceptions about tunneling.
Home: We are like most industries ó we need all of those disciplines and events to occur on an ongoing basis. Contracting practices, specifications, education and training, and research are all important, but any one of them is not in itself a driving factor. We need good contracting practices and we are improving on that as an industry. R&D at Robbins and other TBM manufacturers is ongoing. Like most industries, we need growth in all of these areas to keep expanding.
Lawrence: Education and training will help to sustain the industry long term so long as funding is available and our future society remains underground.
Pope: Weíre an equipment supplier, so this is a little out of our main focus, but if we want to get more tunnels funded and built, we need to do what any successful business does to stay competitive. We need to streamline operations, work smarter and save money through innovative engineering. Tunnels need to be cost effective vs. other options.
Zoldy: The simple answer is that all of it can be improved. We as industry leaders need to learn from the events and outcomes in Europe and elsewhere in the world over the past several years. It is worthwhile to consider how projects are delivered elsewhere and see if it makes economic sense in North America. Training, technology advancements and research are all vital to the industry and need additional funding in 2013 and beyond.
What specific areas of North America have the biggest potential for growth? Why? What opportunities exist for North American companies overseas, and conversely, what are the potential impacts of foreign companies in the North American market?
Bradshaw: The greatest potential for growth in North America is in the energy-rich states and Canada because they have the revenues to fund the work. Europeís financial problems appear even more intractable than the United Statesí and therefore the European tunneling market will take even longer to rebound. Therefore, foreign competition in the United States will continue and possibly creep down into the medium-size market as well over time as these companies integrate further into the United States.
Caiden: As for overseas opportunities for North American companies and vice versa, I think these are limited only by the protectionist legislation that we and other countries have enacted. I would like to see most of these barriers come down as obviously tunneling is now very much a global industry. My own career has been global and taught me that the exchange of knowledge from one country to another has been instrumental to the worldwide growth in tunneling and long may that continue. I am also a believer in the free market and the acquisitions we have seen by the global players are not that surprising. While there will always be room for the small specialists, clearly we can expect more of the established family businesses to get sucked up by the big boys. One alternative to tough times is to bid in other markets and that works both ways but, of course, having a local partner is often a prerequisite to overseas expansion.
Egger: Many of the drivers for major capital programs related to water supply and wastewater conveyance will continue to center around replacement or rehabilitation of infrastructure that has outgrown its useful life. These opportunities will continue to remain strong in most major municipal markets, although decreased revenues over the past five years have limited some citiesí abilities to move needed capital projects forward. Beyond aging infrastructure, regulatory requirements to reduce CSOs will continue to dictate needs for capital projects ñ particularly in small- to mid-size cities in the Midwest and Northeast regions of the United States.
North American engineering companies continue to play a significant role in capital projects on a broad basis with the most significant opportunities residing in South America related to the mining industry. Climate change and severe droughts in Australia have and will continue to provide overseas opportunities in this market. In addition, the need for water and wastewater infrastructure in developing nations such as China, Vietnam and others is creating strong opportunities for North American engineering companies. The Middle East is also considered a very strong market for North American companies.
Foreign engineering and construction companies are already heavily involved in major capital projects in North America. The completion of major capital programs in Europe within the past 10 to 15 years and the emergence of major capital water and wastewater projects in the United States triggered an influx of large European-based constructors to the local marketplace.
Home: California has the biggest potential because of transport, urbanization and irrigation needs. In the northeastern United States, New York, New Jersey and Washington, D.C., are all in need of increased transportation such as subways and high-speed trains. The market is good now in the New York area, and we believe it will stay good.
In terms of overseas potential, it has long been an observation of mine that no U.S. contractors are in the overseas market, despite the fact that we have some excellent U.S. companies that would do well. There is certainly plenty of opportunity, but there has not been much luck so far for U.S contractors overseas. Conversely, too many foreign companies are trying to enter the U.S. market, and it has been that way for some time. This arrangement keeps contracting prices lower than they probably should be. Part of this is due to more foreign suppliers entering the U.S. market, which in turn bring in foreign contractors. These contractors are often in a tough position in the U.S. market, and we donít see there being a bigger influx in the near future.
Lawrence: The biggest potential for growth will be at the many locations across North America having large populations and underdeveloped or aging infrastructure, or areas with rapidly growing populations.
In general, there is already a well-established and highly competitive underground market overseas. Also in the past few decades the North American market has been one of the largest tunneling markets worldwide and so has generated less impetus for U.S.-based firms to seek overseas work.
Pope: Certainly the large ìmegaî project is becoming the norm. It has become more necessary for contractors to form joint ventures to spread the risk and that, in turn, has created an opportunity for foreign companies to enter into the market by joint venturing with American contractors. The slowdown in Europe has also fueled the interest of European contractors. We would love to see more American contractors working abroad. It would be great for our business as an equipment supplier. I can understand their hesitancy, though, given that places like Singapore, Hong Kong and Europe are unbelievably competitive. Margins are very tight. And in many countries it is not a level playing field bidding work against local contractors.
Zoldy: In the United States, I see California, New York, Ohio, Florida and Indiana leading in terms of combined public and private investment in road, water and wastewater infrastructure programs. I see private investment in infrastructure, lately being played out with the use of private investment funds and equities in some areas of the United States. The City of Chicago and the State of Indiana, in particular within the City of Indianapolis, have led the way in terms of private-sector investment in building new underground infrastructure and investing in operation and maintenance of existing wastewater and water assets. In the lead up to 2013, states like California, New York, Georgia, Nevada, Ohio and Michigan were looking very seriously at joining the list of states using private investment for infrastructure.
In Canada, there are four major provinces ñOntario, Alberta, British Columbia and Quebec ñ that are expected to attract major water, wastewater, roads and rail investments. In general, Ontario is leading in spending, Alberta, British Columbia and Quebec all following Ontario.
What trends have you seen in the market recently? What impact are these trends having on the market?
Bradshaw: The trends are continuing price wars and slow deterioration of the tunnel contractorís personnel and equipment until the market place stabilizes and rebounds. Currently, if you do not own the TBM, you might as well not bid the job. This means no new equipment is being purchased to speak of. Tunnel equipment suppliers are claiming only international orders are sustaining them. The U.S. tunneling contractorís equipment fleet is aging rapidly but the bid prices do not afford rental much less new equipment purchases in the small- and mid-size marketplace. Tunneling contractorís personnel ranks are being depleted as their staff ages and baby boomers retire and compensation declines in the exceptionally competitive marketplace. The tunnel market is going into its fifth year of decline/stagnation out of the last four. Unprecedented save the 1930s.
Caiden: Worldwide we are seeing a trend to alternative bids being accepted and an increase in performance-based specifications for PPP and DBO bids. Biddersí alternatives have introduced innovation that otherwise would not have occurred and they have saved money for owners also. In the home market we are still getting over-prescriptive specifications and this stifles innovation. But I think the worldwide trend will eventually be influencing the North American market, though this will take a number of years before it becomes evident.
Egger: The most significant trend I have observed in the market concerns a shift in focus on the part of municipalities and private clients to more effectively manage their assets. In the past, there has been a bandage approach to addressing maintenance of facilities akin to the adage, ìif it isnít broke, donít fix it.î With many major municipalities in a mode of rebuilding their water and wastewater systems in their entirety, and the tremendous expense related to doing so, our clients are recognizing the importance of regularly scheduled inspection and preemptive maintenance that will extend the life of their assets and save money over the longer term. There are significant opportunities emerging for companies with the right combination of water and tunneling expertise to support municipalities and private-sector clients with a systematic approach to inspection and maintenance of their facilities.
The bidding environment remains highly competitive among tunneling contractors, with projects often attracting five to 10 bidders as opposed to a handful prior to the economic slowdown. This trend has resulted in favorable bid prices for owners, with contractors pursuing innovative and cost-saving methodologies to construct projects.
Home: In the United States and North America, we are seeing a much greater acceptance of EPBs, and the use of EPBs on difficult projects. SR 99 and some of the other projects in Washington State are good examples, as well as the Port of Miami tunnel and the Emisor Oriente project in Mexico City. We will see that trend continue in North America, and we will be seeing more EPBs. This trend will also branch out to include more dual-mode/hybrid machines in challenging projects. Conversely, in North America, we will be seeing less use of open, hard-rock machines than we have seen historically.
Lawrence: Several firms that previously hired specialist tunneling design firms to perform underground work are attempting to self-perform some of this work with mixed results. The influx of foreign-owned contractors has increased the competition, and there appears to be increased competition in several areas where the markets are starting to stagnate. The impact of such trends remains to be seen.
Pope: Again, we see a movement away from smaller contracts and creating larger ìmegaî projects. There just isnít as many of those $100 million and below jobs out there, making joint venturing more necessary for contractors. Those changes at the contractor level are changing our business as well. Instead of having 10 jobs we are supplying equipment to, we might have five jobs but at much larger scale. Our business is concentrated to a smaller amount of jobs and so our risk is higher.
Zoldy: Canada continues to benefit from highly efficient markets with strong labor and financial markets, well-functioning financial institutions and well planned infrastructure ready for development. There is a strong desire for alternative funding models such as P3. Several transit-related projects as part of the MetroLinx program in Ontario will been developed as P3s through Infrastructure Ontario, with more envisioned for the foreseeable future. Institutional investors, such as pension funds, are leaders in the private underground infrastructure market in Canada.
The United States continues in a decline that began a few years ago. Although many factors make the economy extremely productive, a number of escalating and unaddressed weaknesses have lowered the U.S. economic rankings recently. U.S. companies are highly sophisticated and innovative and need to be more supportive of their excellent university R&D systems that collaborate extremely well with the tunnel industry.
There are some weaknesses in particular regions of the United States that have not seen any recovery trends. Regional political and business leaders remain concerned about the federal governmentís ability to maintain relationships with the private sector. The real concern that seems to be in the repeated in the media is the federal governmentís ability to spend responsibly.
On a positive note, financial market development measures adopted by the Fed appears to be turning toward a recovery position, thanks in part to interventions with the banking system and their financial crisis that pushed the nation to the edge of the ìfiscal cliff.î