The U.S. transportation construction market will see a 3.1 percent growth from $185.9 billion in 2014 to $191.7 billion in 2015, according to a forecast released by American Road & Transportation Builders Association (ARTBA) Chief Economist Dr. Alison Premo Black.
The projected growth is slightly above the anticipated growth in the overall economy. U.S. Gross Domestic Product is expected to grow between 2.6 and three percent, according to the U.S. Federal Reserve.
The forecast for highway and street work is tempered by two key factors: uncertainty over long-term federal funding, which represents 52 percent of state department of transportation (DOT) capital outlays; and still recovering state and local budgets.
Outside of construction, state and local governments are expected to spend an additional $38.5 billion for maintenance work; $13.2 billion for in-house and consultant planning and design services; and $7 billion for right-of-way purchases as part of their highway and bridge programs.
Below are highlight’s from Black’s forecast on specific sectors:
Highways, Private Driveways & Parking Lot Construction/Pavement
The construction market for highways, streets and related work, private driveways and commercial parking lots will grow to $64.9 billion, up 2.1 percent from $63.5 billion in 2014.
- This includes 1.2 percent growth in highway, street and related work, from $51.8 billion in 2014 to $52.4 billion in 2015. To put this market in perspective, the amount of work completed in 2009 was $67.3 billion.
- The market is expected to be uneven across the country, with highway investment up in 24 states, down in 19 states and Washington, D.C., and within a plus/minus five percent in seven states.
- Approval of over $17 billion for transportation investment through legislative and ballot measures in 2014 will help support the market in the coming years.State legislatures approved 14 measures in 2014 to increase investment, while voters approved 79 percent of the ballot measures.
- The public private partnerships (P3s) market will also support new growth in 2015, with four states awarding their first P3 projects (Colo., N.C., Ohio, and Pa.) earlier this year.
- Contractors will have an additional $30-$40 billion in business opportunities from private highway and bridge work that is completed as part of housing developments and larger commercial structures, separate from parking lots and driveways
Bridges & Tunnels
Record growth is expected to continue in the bridge and tunnel construction market, increasing from $30.8 billion in 2014 to $31.3 billion in 2015.
- The national market is being driven by activity in 10 states, which account for over 57 percent of the market: N.Y., Calif., Texas, Pa., N.J., Wash., Ill., Ohio, Mass.. and Va.
- Bridge construction has grown from 19.6 percent of all highway and bridge work in 2000 to 37.3 percent in 2014. ARTBA says that the share of bridge work will continue growing in the next five years.
Airport Runways & Terminals
The total value of airport runway and terminal construction will grow from $12.5 billion in 2014 to $13.1 billion in 2015, according to ARTBA.
- Growth in the U.S. economy, enplanements and air freight traffic will support increased investment in this sector over the next five years.
- States with significant market activity include Calif., Colo., Fla., Ga., Ill., N.Y., Texas, and Va.
Ports & Waterways
The ports and waterway construction market will increase slightly to $2.8 billion in 2015, up from $2.7 billion in 2014.
- Continued investments from ports on the East and West Coasts, in anticipation of the expansion of the Panama Canal in 2015, will help spur continued investment.
- Some states with increased investment in recent years include: Calif., Fla., La., Miss., N.J., Texas, Va., and Wash.