Specialized Heavy and Civil Engineering Construction NAICS 237990

Apr 7, 2025 - Public Projects Boost Construction Spending

• The total value of construction put in place increased 0.7% in February compared to January, according to the US Census Bureau. Spending on nonresidential projects rose 0.3% to a record $1.26 trillion. Conservation and development spending increased 4.2% in February over January, and water supply projects saw a 1.6% rise. Highway and street construction projects accounted for 40% of February’s nonresidential gains as public projects drove growth, according to Associated Builders and Contractors (ABC) analysis of US Census Bureau data. While public nonresidential spending was up 6.1% in February over the same month in 2024, private nonresidential spending has not kept pace, growing just 2.5% over the same period. In a press release, ABC’s Chief Economist Anirban Basu said, “The mix of high interest rates, tight lending standards, and unprecedented uncertainty regarding trade policy will continue to weigh on private sector construction in the coming months.”
• The state of US infrastructure received a grade of C, according to a recent report card issued by the American Society of Civil Engineers (ASCE) that rates 18 infrastructure categories. The C rating was the highest grade since the ASCE began releasing the reports in 1998. The ASCE cited increased infrastructure spending through the Infrastructure Investment and Jobs Act as the primary driver for the grade improvement. In terms of heavy and civil infrastructure projects, on the high end, ports and rail received a B and a B-, respectively, while stormwater infrastructure got a D. The authors of the ASCE reports urged leaders in Washington DC, ““to continue sustained investment in infrastructure and build on progress made to improve infrastructure after decades of deferred funding and under investment.”

• Soon after taking office, President Trump issued an executive order called “Unleashing American Energy” that included an order to pause and review funding processes that some legal experts suggest will likely have ramifications for the Biden-era Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), according to Construction Dive. Many stakeholders found the order's wording unclear, prompting the Office of Management and Budget to issue a memo limiting the funding pause to programs the original order termed as part of the “Green New Deal.” Even with the clarifying memo, experts suggest the order could stop obligated funding for infrastructure projects that are already underway. The order has faced court challenges, and some legal experts suggest it may take months to understand the repercussions of Trump’s order fully. At the end of 2024, about $294 billion in funding authorized under the IIJA remained unspent.
• Spending related to transportation projects - including rail, airports, and ports – is projected to rise 4% in 2025, 5% in 2026, and 4% in 2027 and 2028, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. An anticipated doubling of air passenger and cargo volumes before 2040 is driving spending for airport enhancements, while increased manufacturing construction is boosting rail and port investments. Construction spending for conservation and development projects is expected to rise by 1% in 2025, 2% in 2026, and 6% in 2027 and 2028. Investments in dams, levees, dredging, and coastal and intercoastal conservation will be among the main drivers of conservation and development spending. Storm-hardening projects in the Southeast to protect newly constructed manufacturing and trade infrastructure facilities will also boost conservation spending.