DALLAS -- The $305 billion, five-year federal transportation funding bill signed into law by President Obama on Dec. 4 is one of the key factors driving an expected 4% growth in the transportation construction market in 2016, according to the latest outlook from the American Road & Transportation Builders Association.
Fixing America's Surface Infrastructure Act (H.R. 22) will provide long-term stability to the highway, bridge, and transit markets for the first time in a decade, said ARTBA economist Dr. Alison Premo Black.
Assured federal support and recent state and local initiatives to increase transportation infrastructure funding will bring public investments in transportation infrastructure to $208.3 billion in 2016 from $200.5 billion in 2015, Black said.
The activity will be uneven, with infrastructure program funding increasing in 23 states and the District of Columbia, but remaining flat in nine states.
"Real growth in highway, road, and street construction in 2016 is moving in the right direction, but is still years away from a full recovery, absent a major increase in investment at all levels of government," Black said.
State and local governments will also spend an additional $42 billion on infrastructure maintenance, $14.8 billion on planning and design of transportation projects, and $7.8 billion on the acquisition of highway and bridge rights-of-way, ARTBA said.
The FAST Act allocates $280 billion from the Highway Trust Fund from fiscal 2016 through 2020 while the fund's revenues over the five years from dedicated taxes and interest are expected to total $208 billion, according to the Congressional Budget Office.
The five-year bill provides $225 billion from the HTF to highways through fiscal 2020. Mass transit funding totals $60.9 billion over five years, including $48.7 billion of formula grants and $11.5 billion of capital investment grants.
Funding in fiscal 2016 for highways in the FAST Act totals $43.1 billion, up from $41 billion in fiscal 2015, ARTBA said in its analysis of the bill. Federal funding accounts for an average of 52% of state capital outlays for highway and bridge improvements.
"The modest increase in federal highway and bridge investment in 2016 will help the program keep pace with changes in inflation, materials, and project costs," Black said.
State and local governments will fund $58.1 billion of road projects next year. The real value of construction of transportation projects declined from $66.3 billion in 2009 to $50.8 billion in 2013, she said.
Airport projects will be up in 2016, growing to $14.3 billion next year from $12.9 billion in 2015. Terminal projects will account for $5.9 billion of the work, with runway extensions and expansions projected to be $6 billion.
Terminal work over the next five years is forecast to reach $8 billion, the same investment levels before the market downturn that began after 2009.
Light rail, subway and railroad construction will slip slightly in 2016 to $21.1 billion, compared to $21.3 billion in 2015, ARTBA said,
"Although a number of ongoing projects have supported record-levels of transit construction work, contract awards in the past year have declined, indicating fewer plans in the pipeline," the analysis said.
The rail market is expected to resume growth of close to 3% in 2017 as the economy continues to expand and federal investment levels stabilize, ARTBA said.
President Obama chided lawmakers for what he considered a low level of infrastructure funding when he signed the five-year transportation bill on Dec. 4.
"Congress should pass a bill like the Grow America Act I've proposed in the past, one that supports even more jobs and invests even more in our roads and highways than the bill passed last night," he said.
The president's six-year, $478 billion proposal (H.R. 2410) would have increased transportation funding by $21 billion per year, with a total of $317 billion for highways and $115 billion for transit through fiscal 2021.
