The U.S. transportation infrastructure market is expected to grow at least 5 percent next year, according to an annual economic forecast released December 4 by the American Road & Transportation Builders Association. However, that growth could evaporate if surface transportation funding legislation is not reauthorized in a timely fashion.
[Above photo by the South Carolina Department of Transportation.]
“The real market growth for 2020 is being fueled by increased transportation investments from federal, state and local governments,” noted ARTBA Chief Economist Alison Premo Black in a statement.
Yet she added that a major “variable” in that outlook is reauthorization of the Fixing American’s Surface Transportation or FAST Act funding law, due to expire in September 2020, and the ability of Congress to find additional revenues to support the Highway Trust Fund.
“Any project delays because states are concerned about whether the next federal surface transportation bill is completed in a timely matter could temper 2020 market growth,” Black added.
Jim Tymon, executive director of the American Association of State Highway and Transportation Officials, expressed that same concern in testimony in a House of Representatives Transportation & Infrastructure joint subcommittee hearing on December 5.
“We need to enact a long-term, sustainable revenue solution for the Highway Trust Fund,” he explained. “Our current funding challenges demand bold action to invest in our transportation infrastructure. This action has the clear support of the American public, and it is time for the President and Congress to make it happen.”
At risk is the potential for significant growth in transportation infrastructure spending, ARTBA’s Black noted.
She said total domestic transportation construction and related-market activity in 2020 should reach $300.4 billion, up from $286.5 billion in 2019, after adjusting for project costs and inflation.
Black added that the transportation construction market grew by 8 percent in 2019 compared to 2018, driven largely by gains in highway, street, and pavement work.
ARTBA projects that the “real value” of public highway, street and related construction investment by state transportation departments and local governments is expected to increase by 6 percent to $77.5 billion in 2020 after growing 15 percent in 2019.
Construction work on private highways, bridges, parking lots, and driveways will increase from $69.1 billion in 2019 to $71.8 billion in 2020 and will continue to grow over the next five years as market activity increases in those sectors, noted ARTBA’s Black.
She noted that the pace of bridge and tunnel construction work stayed flat in 2019 and is forecast to grow by $800 million, or 3 percent, in 2020. By contrast, public transit and rail construction are expected to grow by 5 percent to $24.2 billion in 2020, up from $23 billion in 2019. ARTBA added that subway and light rail investments are expected to set a record in 2020, topping $11 billion compared to $10.3 billion this year.