Capital spending for roadways has averaged a 6% per 10-year CAGR since 1950. However, a new forecast anticipates the CAGR of spending during the next decade to be just 4.8% between 2013 and 2022. According to The U.S. Road, Bridge & Tunnel Construction Market, a new study from energy market research publisher SBI Energy, as long as both state and federal governments refuse to increase their respective gas taxes or implement other user-based funding schemes, long-term market prospects remain bleak.
“While the pay-as-you-go system has worked reasonably well for decades, it is no longer able to pay for all of the roadway construction required to maintain the U.S. road network at its current performance level,” according to Norman Deschamps, SBI Energy analyst and author of The U.S. Road, Bridge & Tunnel Construction Market.
The Federal Highway Trust Fund (HTF) is the primary vehicle through which the federal government collects and transfers money to the states to fund roadway construction. The HTF operates as a pay-as-you-go system, largely funded through taxes on gas and diesel fuel, with the collected funds then transferred to the states through multi-year transportation bills.
“Almost half of the states have less than 60% of their transportation spending come from user-based taxes and fees. The pay-as-you-go system is failing at the federal level as well,” Deschamps continues. “Since 2008, the federal government has had to inject $32.1 billion dollars to maintain solvency of the HTF, and the Moving Ahead for Progress in the 21st Century Act (MAP-21), passed midyear 2012, transfers an additional $18.8 billion into the HTF through FY2013 and FY2014. Unfortunately, MAP-21 also does not address the growing discrepancy between the amount of money collected through user-based fees by the HTF and how much money state and local governments are spending to maintain and improve the nation’s roadway infrastructure.”
Unfortunately for the road, bridge and tunnel construction market, the availability of public funding has been, and continues to be, a serious constraint on the market. This lack of funding shows in the growing discrepancy between fees collected for the HTF and the amount of money needed to maintain those same assets, and in growing debts at all levels of government.
The U.S. Road, Bridge & Tunnel Construction Market by SBI Energy provides key insight into current and future construction trends for the nation’s road infrastructure, with a particular emphasis on bridge and tunnel construction segments and an analysis of key states. The analysis includes definitions, current product offerings and market detail on the following segments:
Road construction, including lane widening, resurfacing and rehabilitation
Bridge construction and rehabilitation
Tunnel & wall construction
The report also studies the key elements driving new road construction, analyzing local, state and federal financing strategies that provide construction funding in the U.S., and the impact these projects have on employment.
About SBI Energy
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