ARTBA: Transportation infrastructure market to expand in 2020

ARTBA expects transportation construction and related market activity to jump to $300 billion in 2020. Photo: iStock.com/Juan-Enrique

The U.S. transportation infrastructure market is expected to grow at least 5 percent next year, according to an annual economic forecast from the American Road & Transportation Builders Association (ARTBA).

“The real market growth for 2020 is being fueled by increased transportation investments from federal, state and local governments,” says Alison Premo Black, ARTBA’s chief economist who conducted the analysis.

Total domestic transportation construction and related market activity in 2020 should reach $300.4 billion, up from 2019’s $286.5 billion, after adjusting for project costs and inflation.

The transportation construction market grew 8 percent in 2019 compared to 2018, driven largely by gains in highway, street and pavement work, which grew by $9.6 billion to $73.1 billion.

Airport construction work on runways and terminals increased by less than 1 percent in 2019, but it was still at record investment levels. Strong growth in the subway, light rail and mass transit sector, as well as private railroad investment, helped support a strong year for transportation construction activity, according to ARTBA.

One variable, Black says, is the outlook for the reauthorization of the FAST Act transportation law, due in 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 adds.

Overall, transportation construction market activity is expected to increase or be steady in about half of the states, the ARTBA analysis shows. Some of the largest markets expected to remain stable or grow include Texas, California, Illinois, New York, Florida, North Carolina, Washington, Minnesota, Michigan, Arizona and Wisconsin.

Other market variables include material prices, increased labor costs and labor shortages in some regions. Among the other key Black findings:

Public and private highway, street and related construction  

The real value of public highway, street and related construction investment by state transportation departments and local governments – the largest market sector – is expected to increase by 6 percent to $77.5 billion 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.

Bridges and tunnels  

The pace of bridge and tunnel construction work remained flat in 2019 and is forecast to grow by $800 million, or 3 percent, in 2020. Bridge and tunnel market activity fell slightly from $28.8 billion in 2018 to $28.6 billion in 2019, after adjusting for project costs and inflation.

Light rail, subways and railroads 

Public transit and rail construction are expected to grow from $23 billion in 2019 to $24.2 billion in 2020, a 5 percent increase.

Subway and light rail investment are expected to reach a record level, increasing from $10.3 billion this year to $11 billion in 2020.

Airport runways and terminals  

After growing 34 percent in 2018, airport terminal and related construction work, including structures like parking garages, hangars, air freight terminals and traffic towers, is estimated to increase from $18.5 billion in 2019 to $19.6 billion.

Runway work is forecasted to increase from $4.7 billion in 2019 to $4.9 billion in 2020.

Ports and waterways 

The value of port and waterway investment should grow to $3.4 billion in 2020. Construction activity in 2019 was $3.3 billion, up from $2.5 billion in 2018.

ARTBA’s forecast is based on a series of proprietary econometric models for each mode and analysis of federal, state and local data and market intelligence.