Highway, Street & Bridge Construction NAICS 237310

Dec 10, 2025 - Continuing Resolution Slows Federal Agency Projects

• The 43-day federal shutdown, the longest in U.S. history, ended November 12, but construction industry disruptions persist, according to Engineering News-Record. Infrastructure agencies, including the Department of Transportation, the Environmental Protection Agency, and the Army Corps of Engineers, remain under a continuing resolution through January 30, 2026, which limits spending, staffing, and new program starts. Contractors are facing mounting delays in grant agreements, environmental reviews, and permit approvals, particularly for transportation, water, and civil works projects. Inflation and seasonal timing compound risks, as procurement delays may drive up material costs. Public owners must still meet Infrastructure Investment and Jobs Act deadlines despite slowed federal processing. The reopening offers a path forward, but recovery will be gradual, requiring strategic planning across the construction sector to manage uncertainty and maintain momentum.
• Construction firms that work on civil infrastructure projects are holding steady as they manage uncertainties, including waning backlog growth and stagnant margins, according to FMI’s fourth-quarter Civil Infrastructure Construction Index (CICI) survey. The CICI reading for the third quarter was 50.6 compared to 50.8 in Q3 2025 – on a 100-point scale. Any CICI reading above 50 indicates that more civil infrastructure contractors see conditions as good than poor. About half of civil infrastructure contractors reported that their backlogs in Q4 met or exceeded their targets. However, most noted that public projects are making up a growing share of overall backlogs, as private-sector projects face greater uncertainty. Contractors expect backlog growth to slow over the next few quarters as more firms vie for a narrower set of public projects. Contractor margins remained steady but flat in Q4 2025 as bid competition and rising cost pressures eroded pricing power.

• 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.