Factoring a modest increase in construction costs, the American Road & Transportation Builders Association (ARTBA) projects that the overall U.S. transportation infrastructure construction market will grow 5 percent this year, to $135.8 billion from $129 billion in 2013.
ARTBA Chief Economist Dr. Alison Premo Black says the market will be led by expected double-digit growth in airport runway and terminal work; 6 percent increase in bridge and tunnel construction; plus, 5 percent or higher growth in total waterway, port, and rail market investment. Uncertainty about the level of federal support for state highway programs after September, however, will continue to depress road pavement prospects.
Black’s working forecast sees the 2014 pavement market growing 2.6 percent nationally, to $54.4 billion, including a) $42.7 billion in public and private highway, road and street investments; and, b) $11.6 billion in mostly private parking lot, driveway and related structure investments. The market will be uneven nationwide, however, as ARTBA projects paving work to be up in 19 states, down in 20, and largely flat in the remaining 11.
“Over the past 10 years, on average nationally, federal funding has provided 52 percent of the money invested by state transportation departments in road and bridge capital improvement projects,” affirms Black. “The federal share ranges from 35 percent in New Jersey to over 70 percent in 11 states. Absent Congressional action to improve the Highway Trust Fund before next October, federal support for state programs faces a potential $40 billion cut in fiscal year 2015. That uncertainty is already putting a damper on state project lettings. Congress needs to act.
“If the federal program can be at least stabilized, the longer term outlook for pavements could be much more positive. Bipartisan political support for significantly increased transportation investment has been seen in a number of bellwether states, including Pennsylvania, Virginia, Ohio, Maryland and Massachusetts. Wyoming and Vermont passed gas tax increases for expanded investment. Eighty-five percent of 2014 transportation investment ballot initiatives passed. And the public-private investment market is picking-up with the expansion of the federal loan guarantee program.”
The ARTBA forecast is based on a proprietary econometric model and analysis of federal, state and local data and market intelligence. Beyond pavement work, the 2014 edition finds:
- Bridge & Tunnel construction growing from $28.5 billion last year to a record-level $30.1 billion in 2014. Large projects in California, Florida, Illinois, New Jersey, New York, Pennsylvania, Texas, Kentucky, Virginia and Washington will account for about half of U.S. market activity in this sector.
- Port & Waterway construction, which has grown by a third since 2011 in anticipation of increased trade through an expanded Panama Canal—starting in 2015—climbing another $100 million from last year. Top market states for contract activity totaling $3 billion will be California, Florida, Illinois, Louisiana, Mississippi, New Jersey, New York, Texas, Virginia and Washington.
- Airport Runway & Terminal work increasing 17 percent, to $14.7 billion, with market-driving states including Arizona, California, Colorado, Florida, Georgia, Illinois, Massachusetts, New York, Ohio, Tennessee, Texas, Utah, Virginia and Washington.
- Light Rail, Subway & Railroad construction markets continuing to see growth. Subway and light rail work is set to increase 5 percent, to $7.9 billion from $7.5 billion in 2013. Heavy rail investment, largely by Class 1 freight railroads, will increase 8 percent, to $12.6 billion. Increase in demand to transport goods, including shale and crude oil, as well as multi-modal improvements for better port-rail connections, are driving higher levels of railroad investment. Based on recent state and local government contract awards, key projects are proceeding in California, Colorado, Washington, D.C., Florida, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Texas and Washington.