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Bridge, Highway Work Hits the Brakes

Monday, March 11, 2013

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Contract awards for bridge and highway projects have been scaled back in nearly half of U.S. states in the past year, a new report shows.

The real value of highway and bridge contract awards has declined by three percent over the last 12 months, compared to the previous 12-month period, the American Road & Transportation Builders Association (ARTBA) reported.

U.S. DOT Federal Highway Administration

Bridge and highway contract awards from local and state governments declined by 3 percent over the last 12 months, the transportation group reported.

State and local governments awarded $54.3 billion in real bridge and highway contract awards between February 2012 and January 2013, compared to $55.8 billion awarded between February 2011 and January 2012, the association reported.

The latest analysis was based on data from McGraw-Hill Dodge.

Hits and Misses

Contract awards are a leading indicator of a state's level of construction activity, and the outlook on a state-by-state basis was mixed.

"We did see a significant jump in the value of awards in January 2013," said Dr. Alison Premo Black, ARTBA's chief economist, said in an announcement about the report.

"Although that is a positive sign, the increase was primarily due to several large projects in Arizona, Arkansas, California, New York and Virginia."

Highway awards were up in 20 states; down in 23 states and Washington, D.C.; and within a range of plus or minus five percent in seven states. Bridge awards were up in 24 states; down in 22 states and Washington, D.C.; and within plus or minus five percent in four states.

'Pulling Back'

"This tells us that nearly half the states are pulling back on their programs," said Black.

"The good news is that we do expect to see an uptick in activity later this year, given the recent increase in federal aid obligations—many of those projects should go through the bidding and awards process over the next few months.

"It remains to be seen, however, if it will be enough to provide real growth in the highway and bridge construction market by the end of 2013."

Virginia Department of Transportation

After a decline in the overall value of contract awards from February 2012 to January 2013, January saw a "significant jump" in awards, ARTBA reported.

The figures take into account changes in wages, materials and inflation. Figures do not include contracts for planning and design work, environmental analysis, or project management associated with transportation capital projects, editors of the report noted.

Good News Elsewhere

While highway and bridge contract awards were down, other infrastructure sectors saw an increase over the last year.

State and local government contract awards for docks, piers and wharves were up nearly 30 percent in the last 12 months, to $1.4 billion. Awards in California, Georgia and New Jersey drove growth in January, according to ARTBA.

Transit and railroad awards were also up nearly 30 percent, to $3.5 billion, for state and local government awards. This reflects an increase in demand after the federal aid program was extended by 33 months. Projects in California, Illinois, New Mexico and Pennsylvania drove growth in January.

However, the value of state and local government airport runway contract awards was down 3.2 percent.

About the Association

Based in Washington, D.C., the American Road & Transportation Builders Association is the "consensus voice" of the U.S. transportation design and construction industry, representing more than 5,000 public- and private-sector members.

The association, established in 1902, says its "primary goal is to aggressively grow and protect transportation infrastructure investment to meet the public and business demand for safe and efficient travel."


Tagged categories: American Road & Trans Builders Assn (ARTBA); Annual report; Bridges; Construction; Contract awards; Department of Transportation (DOT); Federal Highway Administration (FHWA); Roads/Highways

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