Concrete Market Faces Inflection Point

By Laura O’Neill Kaumo and Nathan Reede, Contributing Authors

The U.S. concrete paving market continues to benefit from the Infrastructure Investment and Jobs Act (IIJA), which has provided strong, multi-year support for transportation infrastructure. As the industry looks ahead, contractors and owners are preparing for an evolving funding environment shaped by fiscal reviews, Highway Trust Fund (HTF) challenges and the need for long-term reauthorization.

Formula highway funding under the IIJA — the primary source of dollars that flow to states for roads, bridges and associated paving work — remains authorized across fiscal years 2022–2026. That framework under the Federal Highway Administration runs through Sept. 30, 2026, allowing states to plan and program predictable dollars for pavement maintenance and capital projects for several more years.

However, the timeline for reauthorization is beginning to draw focus. The current authorization expires at the end of FY 2026, which means Congress will need to act on a surface transportation reauthorization or rely on short-term extensions to maintain program certainty. Congressional workload and broader fiscal priorities have compressed the time available to craft a successor bill, and most observers expect any future reauthorization to face tighter fiscal constraints than the IIJA.

In the near term, the administration has conducted a review of unobligated discretionary balances across federal departments, part of a broader effort to manage fiscal exposure and align unspent funds with current budget priorities. While this process has modestly reduced the pool of competitive grant dollars available for new projects, core IIJA formula programs remain intact and continue to support steady state and local investment. 

For concrete paving firms, this situation generally favors contractors engaged in recurring state department of transportation (DOT) and municipal work.

The IIJA has already delivered measurable benefits, despite persistent challenges with inflation. The American Society of Civil Engineers’ 2025 Infrastructure Report Card raised the nation’s overall grade, citing IIJA investments as a major contributor. Still, the report underscored that more will be required to close the nation’s long-term investment gap in highways, roads and bridges. IIJA moved the needle, but continued reauthorization and modernization will be essential to sustain progress, which is challenging.

As outlined in the 2025 Sullivan Report, HTF, which provides the core federal revenue stream for surface transportation, faces significant structural headwinds. 

The federal gas tax, unchanged since 1993 at 18.4 cents per gallon, has lost much of its purchasing power due to inflation and rising construction costs. Adjusted using highway construction costs as a deflator, today’s fuel tax is worth roughly 7 cents per gallon and is projected to decline to just under 6 cents by 2030. 

Compounding this problem is the growing number of electric vehicles (EVs), which could cause a shortfall of $2 billion by 2030 under the current trajectory. Congress must figure out a funding mechanism while passing infrastructure reauthorization. 

Inflation has eased from its 2022–23 highs but remains a factor in project planning. The September 2025 Consumer Price Index showed headline inflation at about 3% year-over-year, keeping material and labor costs elevated. If economic growth softens further, demand for key construction inputs such as cement, aggregates and diesel could ease modestly, providing some cost relief. 

Broader economic signals remain mixed. Freight activity — a key driver of pavement demand — has flattened after a midyear uptick, while equity markets remain strong amid optimism about technology, productivity and the potential for lower interest rates in 2026.

Despite fiscal and reauthorization challenges, there is reason for optimism. President Donald Trump and Transportation Secretary Sean Duffy have consistently emphasized infrastructure as a national priority — not only as an engine of job creation and economic competitiveness but also as a platform for innovation. 

Their continued focus on safety, sustainability and modern construction methods supports a forward-looking federal approach that benefits contractors and the traveling public.

As the next reauthorization cycle approaches, the concrete paving industry’s challenge — and opportunity — will be to help policymakers frame infrastructure spending not as a cost, but as a high-return investment in the nation’s economic vitality.

Laura O’Neill Kaumo is the president and CEO of the American Concrete Pavement Association. Nathan Reede is the CEO of Reede Construction and a ACPA board member.