Highway, Street & Bridge Construction
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 8,600 construction companies in the US build transportation-related infrastructure; including highways, roads, streets, airport runways, and bridges. Companies may also build driveways and parking areas. Industry revenue consists of new construction (59% of industry sales), additions, alterations, or reconstruction (22%), and maintenance and repair (19%).
Dependence On Government Spending
The majority of industry revenue comes from publically funded programs, mainly state and local government projects.
Variability In Costs
With low margins, variability in the cost of materials and labor can be a challenge, particularly for fixed unit price and lump sum contracts.
Industry size & Structure
A typical highway, street, or bridge construction company operates out of a single location, employs about 43 workers, and generates about $14.4 million annually.
- The highway, street, and bridge construction industry consists of 8,600 companies that employ about 370,000 workers and generate $124 billion annually.
- Government contracts account for about 73% of industry revenue, and the majority of government contracts are issued by state and local governments.
- Large companies include Kiewit Corporation, Granite Construction, and US divisions of Skanska.
- Most small to medium-sized companies operate within a limited geographical market.
Industry Forecast
Highway, Street & Bridge Construction Industry Growth
Recent Developments
Oct 11, 2024 - Highway, Bridge Spending to Remain Steady
- US spending for highway and street construction in 2024 is expected to grow by about 4%, according to FMI’s fourth-quarter 2024 North American Engineering and Construction Outlook. While funding from the Infrastructure Investment & Jobs Act (IIJA) is scheduled to expire in 2026, FMI expects another round of fresh funding as temporary and grant projects are either extended or made permanent. Bridge investments are forecast to account for a majority of highway, bridge, and street funding through the end of 2024. Highway and street spending is forecast to rise 3% in 2025 and 2026, then taper off to 2% growth in 2027 before increasing 4% in 2028.
- According to a recent report by the US Department of Transportation (DOT), only 40% of the $550 billion in new spending funded through 2021’s Infrastructure Investment and Jobs Act (IIJA) has been announced, suggesting a lag in progress. The funds provided through the IIJA will be available until they are spent, so the funding could go beyond the law’s five-year scope. However, securing IIJA funding is cumbersome, as it flows from more than 400 programs through federal, state, and local entities. Analysis of White House data by CNBC suggests the bulk of IIJA funding has gone to road and bridge projects, followed by rail, broadband, power, and water projects. According to the DOT report, IIJA funding has been announced for 10,200 bridge projects, 1,000 airport projects, 500 port and waterway projects, 170 rail projects, and 11,200 public transit projects.
- Developers are feeling more optimistic about construction conditions, which may be leading to fewer project abandonments, according to recent data from ConstructionConnect. In September 2024, project abandonments fell 49.8% compared to the same period a year earlier. Abandoned projects are those that have a delayed bid date, been paused, or have been cancelled. Within the private sector, project abandonments fell 9.4% in September 2024 compared to September 2023, projects put on hold dropped 6.8%, and delayed bid activity was flat with a 0.1% decline. Public projects saw a 17.6% year-over-year drop in projects put on hold in September, and abandonments fell 5.5%. Developers are likely feeling more optimistic after the Federal Reserve cut interest rates by 0.5 percentage points on September 18.
- Extreme heat and flooding brought on by climate change are taking a toll on US bridges, according to The New York Times. About a quarter of US bridges were built before 1960, and they were not designed to withstand large and sudden temperature changes which can cause materials to weaken as they expand and contract, according to some engineering experts. According to an estimate by science and medicine journal PLOS ONE, extreme heat could cause 25% of steel bridges in the US to collapse by 2050. Other studies suggest “bridge scour,” whereby heavy rains cause soil erosion around bridge foundations, is the leading cause of bridge failure in the US. The bipartisan infrastructure law passed in 2021 includes $110 billion for bridge, road, and other transportation repairs and upgrades.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.