Highway, Street & Bridge Construction NAICS 237310

Nov 10, 2025 - Nonresidential Construction Conditions Weak

• During a webinar in October, Associated Builders and Contractors (ABC) chief economist Anirban Basu warned of tightening conditions for the U.S. construction industry, with rising interest rates, material costs, and financing challenges threatening project viability, according to Construction Dive. While data center construction remains strong, driven by investments in AI infrastructure, other sectors, such as commercial, manufacturing, and public infrastructure, are cooling due to tariffs, saturated markets, and dwindling government funding. Contractors outside the data center space report shrinking backlogs and reduced deal flow. The expiration of federal infrastructure funding in 2026 may further dampen demand.
• A new Volcker Alliance report warns that inconsistent and incomplete disclosure of deferred-maintenance liabilities by state governments is masking the accurate scale of U.S. infrastructure decay, estimated at $1 trillion, according to reporting by Engineering News-Record. The study, developed with the University of Minnesota and Pew Charitable Trusts, highlights wide disparities in how states report and manage maintenance needs, with about 20 states lacking public accounting. California and Massachusetts offer detailed inventories, while others, like Oklahoma, do not consolidate data. Pew estimated that state and local governments have about $105 billion in deferred maintenance for roads and bridges, and more than 30 states have a combined $86.3 billion in estimated shortfalls by 2035. The backlog has surged to $370 billion at the federal level, prompting the GAO to flag “Building Condition” as a high-risk issue. Without standardized data, policymakers struggle to prioritize investments, leading to preventable failures and rising costs.

• North American construction and engineering spending for highway and street projects in 2026 is expected to rise 1% after anticipated flat growth in 2025, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. Infrastructure spending has been supported by funding from the Infrastructure Investment and Jobs Act, but it will expire in September of next year. Reauthorizing federal funding will be critical to maintain highway and street investments, but FMI expects funding to meet or exceed current levels through 2029. Highway and street construction spending is forecast to rise by 2% in 2027, 4% in 2028, and 5% in 2029.
• In a recent conversation with Construction Dive, Silvia Ruiz of Netherlands-based civil engineering firm Ferrovial discussed the opportunities in the US transportation infrastructure sector. Ruiz noted that Ferrovial’s highway construction division is thriving, with North American assets delivering a 14.9% revenue increase in the first half of 2025. The company sees highways as resilient, long-term investments that support mobility, economic growth, and inflation-adjusted returns. Public-private partnerships are central to Ferrovial’s strategy, helping cities overcome funding gaps and deliver critical infrastructure. Projects like the TEXpress lanes in Dallas-Fort Worth have generated $24 billion in economic impact, supported 115,000 jobs, and inspired similar models in Virginia and North Carolina. With a healthy order book and strong local sourcing, Ferrovial is well-positioned to meet rising demand in cities like Atlanta, Charlotte, and Nashville. Despite higher borrowing costs, updated federal financing programs and streamlined regulations are expanding opportunities. As highways evolve with smart tolling and digital tools, Ferrovial continues to invest in durable infrastructure that benefits communities and stakeholders.