The real value of highway and bridge contract awards was down nearly 14 percent for the first half of 2014 compared to last year, according to ARTBA’s analysis of data from McGraw Hill. State and local governments awarded $29.8 billion in highway and bridge work between January and June 2014, compared to $34.6 billion during the same time period in 2013, when adjusted for material costs and inflation.
The latest data indicates that the slowdown we have seen throughout 2014 is continuing into the summer construction season, when state and local governments put out most of their awards. It is likely that this pullback is in part due to the uncertainty surrounding the federal aid program and the Highway Trust Fund. Absent new revenues, the federal aid program would not be able to support any new highway and bridge projects in FY 2015, which begins October 1. At least 35 states have publicly warned they might have to consider canceling or delaying projects if Congress does not resolve the situation soon.
The slowdown is widespread, with 25 states awarding fewer highway and bridge contracts by June 2014 than they did a year ago. Awards were up in 21 states and Washington, D.C., and programs were fairly flat in five states, either up or down within five percent.
Contract awards are a leading indicator of future work in the industry as projects get underway. Detailed data by state and mode is available as part of ARTBA’s market subscription reports. For more information, contact ARTBA’s Lital Shair at firstname.lastname@example.org.