2014-04-18 11:49:02 - Road & Highway Construction in the US - Industry Market Research Report - a new market research report on companiesandmarkets.com
The recession took a heavy toll on nearly every US construction industry. However, the United States road construction market and highway construction industry fared better than most, due to robust federal stimulus investment in infrastructure development. The American Recovery and Reinvestment Act of 2009 sponsored many transportation ventures, resuscitating many stalled projects and funding others that would never have gotten off the ground otherwise. During the five years to 2013, industry revenue grew at an average annual rate of 2.8% to $49.7 billion. In 2013, revenue is expected to increase 3.5%; growth can be attributed to increases in government funding for highway projects.
While revenue has grown, highway contractors in the United States were not immune to the recession´s negative effects.
Falling demand from the private sector and decreased state and local government funding have drastically increased competition for federally funded projects. As competition intensifies, operators are increasingly competing for projects on price; consequently, profit margins are suffering. Average industry profit has fallen from 15.5% in 2008 to 7.4% in 2013. Industry employment has stagnated as a result of the economic downturn and increased industry reliance on subcontracted labor. The industry employs 185,053 people in 4,641 establishments, including permanent and part-time payroll employees.
The industry is expected to return to moderate growth in 2013, with the new Surface Transportation Extension Act of 2012. Additionally, President Obama signed the Moving Ahead for Progress in the 21st Century Act (MAP-21) into law on July 6, 2012. This program funds surface transportation programs at more than $105.0 billion per year for the 2013 and 2014 fiscal years. MAP-21 is the first long-term highway authorization enacted since 2005. Furthermore, the improving US economy, consumer spending, private-sector development, and state and local governments´ transportation funding will likely boost the industry´s performance. In the five years to 2018, industry revenue is projected to increase at an average annual rate of 1.6% to $53.7 billion.
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