The transportation infrastructure outlook remains healthy for the second half of 2017, despite a lack of clarity from the Trump Administration on plans for beefing up spending, Fitch Ratings said on Monday.

“Low fuel prices should keep travel costs affordable, while large transportation enterprises will still need to borrow debt at least for the foreseeable future in order to help provide congestion relief and serve ongoing infrastructure renewal needs,” according to Fitch’s midyear report. “Longer term, however, in just what manner U.S. economic and fiscal policies materialize make the outlook more uncertain.”

Growth in passenger traffic at U.S. airports remains solid though it will level off somewhat in the coming months, Fitch said.

Airport traffic performance remains positive in 2017 based on solid demand, Fitch says.
Airport traffic performance remains positive in 2017 based on solid demand, Fitch says. Bloomberg News

“Large-hub airports are still the strongest performers in the aggregate, though smaller regional airports are now showing improved performance as well,” said Seth Lehman, Fitch senior director.

Airport traffic performance remains positive in 2017 based on solid demand for air travel. Overall passenger growth is tracking in the 2.0% - 2.5% range, the report said.

Volume growth should continue to mirror that of GDP for U.S. ports for rest of the year.
However, Fitch director Emma Griffith said that “shipping company mergers, changing alliance structures and fluctuating freight rates will shift volumes, which could alter contractual protections for select ports.”

For toll roads, Fitch said the growth outlook is more moderate for the second half of the year. Inflationary toll increases should lead to stronger revenue growth, with much of the greenfield development still emanating from managed lanes.

“Toll roads still face political risk, including federal funding uncertainty and state tolling opposition,” said Fitch director Tanya Langman.

A more cautious growth trajectory remains for public private partnerships as well, according to Fitch.

Scott Zuchorski, Fitch senior director, said that while more state and local governments are exploring P3 financing models, “there remains a scarcity of funding and a lack of understanding around the P3 structure, meaning most infrastructure needs will continue to be financed via more traditional means.”

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.