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Transportation Spending Recovery Continues

Port of Oakland, California aerial view
Spending on ports is expected to grow 25 percent this year as the completion of the Panama Canal expansion project draws near. Much of the remainder of the U.S. transportation market will grow more sluggishly in 2013, according to a new report. Wikimedia Commons/Jeffrey G. Katz

The ARTBA projects a continuation of a slow economic recovery in 2013, with transportation construction spending increasing 3 percent overall.

January 15, 2013—The long, sluggish economic recovery in the U.S. transportation construction infrastructure market is expected to continue in 2013, the sector projected to grow approximately 3 percent to $130.3 billion, according to a new forecast released recently by the American Road and Transportation Builders Association (ARTBA).

“ARTBA members—including our planning and design firms—prepare for 2013 and the future using the annual ARTBA forecast,” said ARTBA spokesperson Beth McGinn, in written comments to Civil Engineering online. “Our model is showing modest growth this year, which isn’t surprising considering [the Moving Ahead for Progress in the 21st Century Act] MAP-21 offers stability, but no new funding, and state and local governments are still facing significant fiscal challenges.”

The forecast, U.S. Transportation Construction Market Forecast 2013, is based on an ARTBA economic model that examines variables at the federal, state, and local levels to estimate the value of construction put in place as defined by the U.S. Census Bureau, and also includes an internal estimate of the private driveway and parking lot market.

“One bright spot for the market is the ports sector,” McGinn said. “Driven by expanded sea trade expected with completion of the Panama Canal expansion project in 2015, U.S. ports and waterway construction is expected to skyrocket nearly 25 percent to $2.65 billion with increased market activity anticipated in California, Florida, Kentucky, Maryland, Massachusetts, Mississippi, New Jersey, New Hampshire, New York, Texas, Virginia, and Washington.”

Bridge and tunnel spending set a record in 2012 at $28.5 billion, capping several years of dramatic growth. ARTBA projects spending in that sector will drop slightly in 2013, to $28.2 billion. Projects in California, Florida, Illinois, New Jersey, New York, Pennsylvania, Texas, and Washington will account for about half of the activity in the nation.

Bridge and tunnel spending is projected to grow in 2014 through 2017, fueled by a need to replace crumbling infrastructure. The forecast notes that approximately 24 percent of the bridges in the United States are deemed as structurally deficient or functionally obsolete. “State DOTs and local governments have identified a backlog of over $316.6 billion in needed repairs,” the forecast states.

Pavement is the largest sector in the industry, projected to account for $47.7 billion in highway, road, and street projects in 2013. That represents a 2.3 percent increase in public projects following two years of declines. Private projects in parking lots and driveways will contribute an additional $10.7 billion.

ARTBA’s model foresees a sluggish pavement market moving forward, with spending declining in 2014 and then struggling through 2017 to rebound to the 2010 level of $51 billion. Spending in the pavement market will be regional, with 25 states projected to decline, while 19 states experience healthy growth.

The forecast notes that MAP-21 might increase pavement spending beyond the projections if states use the new flexibility in the law to increase spending on highways and roads. Also, the Transportation Infrastructure Finance & Innovation Act loan program could spur spending in some states.

Rail construction spending is projected to increase about 5 percent to $10.4 billion in 2013. The forecast cites a 33-month delay in passing MAP-21 for a projected 8.1 percent decline in spending in the subway and light-rail sector. Spending in the sector is projected to rebound in 2014 with a sluggish recovery to 2010 levels by 2017.

The airport and runways sector is projected to increase to $12.5 billion in 2013, up from $11.9 billion in 2012. The sector is projected to be an area of strength in the coming years, with spending expected to reach $19.3 billion by 2017. The spending will be concentrated by market and driven by increases in enplanements.

The forecast also notes that the impact of recovery projects for the areas heavily damaged by Hurricane Sandy will impact the industry, but that those effects can’t be calculated yet. “It’s fair to say that major reconstruction work along the East Coast in affected states will also be a market factor in 2013 across all modes. Additional federal, state, and local emergency funds for rebuilding this infrastructure will be a boost as projects get under way,” the forecast states.


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