By Dr. Alison Premo Black, chief economist, ARTBA
The 2021 fiscal year is off to a slow start as state and local governments awarded $6.7 billion in transportation contract awards in July, down from $11 billion in July 2019. The July average for 2017-2019 is $9.6 billion.
The value of awards was down in 36 states and up in 15. States increasing the value of awards include South Carolina, New Jersey, Massachusetts, Indiana, and Arkansas.
The fiscal year begins July 1 in 46 states. The slowdown in the value of awards is driven by budgetary impacts of the COVID-19 pandemic.
Watch these variables over the next few months to gauge market conditions:
- To what extent state and local governments delay projects or reduce capital spending if transportation revenues fall below 2019 levels or original budget projections;
- How quickly the broader U.S. economy recovers and the national impacts on overall state and local budgets; and
- Any action by Congress related to transportation funding. This includes the reauthorization of the FAST Act or an extension of the program, the annual appropriations process, and the potential for any additional COVID-19 emergency relief to state DOTs.
The monthly value of awards can fluctuate significantly based on state programs and projects.
Details by state and mode are available as part of ARTBA’s Transportation Construction Market Intelligence Service.