Highway construction expected to grow

Driven by record federal investment in surface transportation, increased spending through the American Recovery & Reinvestment Act (ARRA) and continued easing in material prices, the highway construction market is expected to grow eight percent in 2010, according to ARTBA annual economic forecast.

ARTBA Vice President of Policy & Economist Alison Premo Black says the value of highway, street and bridge construction (from all sources) put in place should reach $90.5 billion in 2010, up from about $83.9 billion this year.

Black cautions, however, that the boost to the market could be temporary. Uncertainty over the reauthorization of the multi-year federal surface transportation bill and future growth of the overall U.S. economy, along with the end of stimulus funds, will determine if there is a “soft landing” in 2011 or a more significant downturn, Black said.

The association’s 2010 forecast takes into account current economic conditions, federal investment and state and local funding. The $41.2 billion in 2009 federal highway obligations, as well as the additional $26.7 billion available through the ARRA, will provide the foundations for growth in 2010. Although there are general concerns regarding state and local spending, states are expected to continue to provide matching funds for the traditional federal aid program investment and spend their ARRA funding.

“Despite the current economic environment and budget challenges, 38 states have increased the real value of their contract awards between January and October 2009 compared to the same time period in 2008,” Black noted. “The real value of contract awards for highways and bridges is nearly $50 billion so far, an increase of $5 billion and an important leading indicator for the 2010 construction season. -- Mark S. Kuhar