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
Jul 12, 2024 - Social Media Influencers Boost Interest in Skilled Trades
- Some young workers in the skilled trades are finding a wide following for their social media posts that chronicle their day-to-day activities on the job site, according to The Wall Street Journal. Interest in the skilled trades among Gen Z is growing as many younger workers look for employment that doesn’t involve taking on large amounts of debt and offers competitive wages. In 2023, enrollment in vocation-focused community colleges increased by 16%, marking the highest level since the National Student Clearinghouse began tracking the metric. For many younger job seekers, skilled tradespeople posting about their work on social media sites is their first exposure to the trades, and construction insiders report that such posts can help in recruitment.
- The US Occupational Safety and Health Administration (OSHA) has proposed a new rule that would create a new safety standard for exposure to excessive heat in US workplaces. The rule, if finalized, would impact highway, street, and bridge contractors. The National Asphalt Paving Association (NAPA) has developed and distributed guidelines for heat illness prevention. While NAPA has indicated that it would have preferred an OSHA heat-related regulation that was better tailored to the asphalt paving industry, it believes the association’s current guidance will meet the compliance standards of the proposed rule.
- The Associated Builders and Contractors (ABC) Construction Backlog Indicator rose 0.1 months to 8.4 months in June compared to May. Backlogs were down 0.5 months compared to June 2023’s 8.9 months. The heavy industrial segment drove June’s construction backlog growth, which rose to 9.6 months in June compared to May’s 8.8 months. The infrastructure backlog rose by 0.2 months, and the commercial and institutional backlog was flat. The ABC’s Construction Confidence Index for sales fell to 59.4 in June from 59.9 in May. A Confidence Index sales reading of 50 or more indicates most contractors are optimistic about sales. ABC Chief Economist Anirban Basu said, “Backlog continues to hold up remarkably well despite high interest rates, inflation and emerging weakness in the broader economy."
- According to Construction Dive, in comments at the National Institute of Building Sciences’ Building and Innovation Conference in late May 2024, a research engineer for the Federal Highway Administration’s (FHWA) Office of Infrastructure Research and Development suggested contractors and engineers need to account for climate change in their road designs and risk assessments. The speaker, Amir Golalipour, noted that road builders must be prepared for more extreme weather, rising sea levels, and hotter temperatures, which damage highways. According to the National Oceanic and Atmospheric Administration, in 2023, there were a record 28 different billion-dollar weather and climate disasters in the US. Golalipour said flooding can reduce a road’s strength by half and that roadways face similar threats from fires, higher rain levels, and extreme freeze-thaw events. He also noted roads made from recycled asphalt are vulnerable to extreme weather.
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