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Moderate 2014 Growth Forecast for U.S. Transportation Infrastructure Market
ARTBA Chief Economist Dr. Alison Premo Black said the market would be led by expected double-digit growth in airport runway and terminal work, a six percent increase in bridge and tunnel construction, and five percent, or better, growth in total investment in waterways and ports, and heavy and light rail.
Uncertainty about the level of federal support for state highway programs after next September, however, will continue to depress the road pavement market next year.
Black forecasts the pavement market will grow to $54.4 billion in 2014, up 2.6 percent nationally. This includes $42.7 billion in public and private investment in highways, roads and streets, and $11.6 billion in largely private investments in parking lots, driveways and related structures. The market, however, will be uneven nationwide, she says. ARTBA forecasts 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,” Black said, noting, “The federal share ranges from 35 percent in New Jersey to over 70 percent in 11 states.”
“Absent congressional action to improve the revenue stream into the federal Highway Trust Fund before next October, federal support for state programs faces a potential $40 billion cut in fiscal year 2015,” she said. “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,” Black says. “Bipartisan political support for significantly increased transportation investment has been seen in a number of bell-weather states this year, including Pennsylvania, Virginia, Ohio, Maryland and Massachusetts. Wyoming and Vermont passed gas tax increases for expanded investment. Eighty-five percent of the 2014 transportation investment ballot initiatives passed. And the public-private investment market is picking-up with the expansion of the federal loan guarantee program.”
ARTBA’s 2014 forecast for other transportation modes:
Bridges & Tunnels—Bridge and tunnel construction is expected to grow from $28.5 billion in 2013 to a record-level $30.1 billion next year. ARTBA says large projects in 10 states—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.
Ports & Waterways—The port and waterway construction market, which has grown by a third since 2011 in anticipation of increased sea trade through the Panama Canal starting in 2015, is expected to grow another $100 million, to $3.0 billion next year. The top market states will be: California, Florida Illinois, Louisiana, Mississippi, New Jersey, New York, Texas, Virginia and Washington.
Airport Runways & Terminals—The total value of airport runway and terminal construction is expected to increase 17 percent to $14.7 billion in 2014, ARTBA forecasts. Market-driving states will include: Arizona, California, Colorado, Florida, Georgia, Illinois, Massachusetts, New York, Ohio, Tennessee, Texas, Utah, Virginia and Washington.
Light Rail, Subways & Railroads—The domestic light rail, subway and railroad construction markets will continue to see growth in 2014. Subway and light rail work will grow five percent to $7.9 billion from $7.5 billion. Heavy rail investment, largely by Class 1 freight railroads, will increase eight percent to $12.6 billion this year from $11.6 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, these states will be moving forward on key projects: California, Colorado, Washington, D.C., Florida, Illinois, Massachusetts, Minnesota, New Jersey, New York, Oregon, Pennsylvania, Texas and Washington.
The ARTBA forecast is based on a proprietary econometric model and analysis of federal, state and local data and market intelligence.
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