The U.S. transportation construction market is expected to shrink 5.5% next year, according to the annual forecast released Dec. 10 by the American Road & Transportation Builders Association (ARTBA).
ARTBA says the projected decline is driven primarily by the severe economic recession caused by the coronavirus (COVID-19) pandemic. Overall, the value of work is expected to drop from $294.2 billion in 2020 to $278.1 billion in 2021, according to ARTBA Chief Economist Dr. Alison Premo Black’s analysis.
The expected market contraction follows a record year for most transportation sectors in 2020. While Pennsylvania and Washington State temporarily shut down projects in the spring, the rest of the country classified transportation construction as an essential industry.
Transportation improvements continued with enhanced safety protocols in place. As a result, total transportation construction activity—after project costs and inflation—is expected to increase by nearly 4% in 2020, with significant gains in highway and street construction (+8.3%), subway and light rail work (+8.8%), airport terminal and runway construction (+7.2%), and port and waterway spending (+12%). Bridge and tunnel construction was the exception, with activity falling 20% in 2020, reflecting several broader market trends including a focus on smaller structures.
The major drop-off in transportation user fees caused by COVID-19 stay-at-home orders initiated last spring, high national unemployment, and the decline in public transit use and demand for air travel are the key factors affecting the outlook, ARTBA says.
“Not surprisingly, the 2021 market reflects the broader COVID-19 economic contraction that began in February 2020,” Black said in a statement. “Congress and the president could help mitigate the economic downturn and put the nation on the road to a stronger recovery by approving a long-term, robustly funded transportation infrastructure investment package early in 2021.”
States are expecting shortfalls in transportation revenues of anywhere from $35 billion to $40 billion through 2024, ARTBA says. Key findings of the ARTBA forecast can be found on the association's website.
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SOURCE: ARTBA
