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 Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 8,800 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 39 workers, and generates about $14 million annually.

    • The highway, street, and bridge construction industry consists of 8,800 companies that employ about 345,200 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
                              Source: Vertical IQ and Inforum

                              Coronavirus Update

                              May 11, 2022 - Road-Building Trade Group Opposes Gas-Tax Holidays
                              • The American Road & Transportation Builders Association is lobbying lawmakers in Washington DC to oppose gas-tax holidays or other efforts to reduce taxes on gasoline, according to The Wall Street Journal. Politicians on both sides of the aisle on the state and federal levels are under increasing public pressure to provide relief to consumers amid skyrocketing gas prices. Fuel costs were already on the rise when Russia’s invasion of Ukraine and resulting sanctions by the US and its allies upended global energy markets. Opponents to gas-tax relief argue it could reduce funding for infrastructure spending and undermine the impact of the $1 trillion bipartisan infrastructure law passed in late 2021.
                              • Shifting population patterns that were trending before the pandemic gained steam during the health crisis, which could affect future highway and street spending. More than two-thirds of large urban counties saw their populations shrink in 2021, according to the analysis of US government data by the Economic Innovation Group (EIG). This change is thought to have in part been caused by the large increase in working from home and a decline in immigration. About 80% of exurban communities (populations under 50,000 with at least 25% of the population in a large or medium-sized suburb and within a large metro area of 500,000 or more) gained in population in 2021. While exurban and rural areas saw strong growth, the number of suburbs that grew in 2021 declined.
                              • The American Association of State Highway and Transportation Officials expect pandemic-related state transportation revenue losses to be recovered by 2025.
                              • US highway and street construction spending decreased 0.4% in value month over month on an adjusted basis but rose 8.5% in value year over year on an unadjusted basis in March 2022, according to the US Census Bureau.
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