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Road Construction Industry in United States

By: Daren AllPaving June 20, 2019

It has been a very long time since man first discovered the way of building roads. Ancient roadways were little more than dirt compacted over time by the constant use of foot-traffic and horse-drawn conveyance. Therefore, this industry is growing day by day thanks to technology and new machinery that is more effective and provides better results in less time.

The Federal Highway Administration (FHWA) is a government agency that deals with highway transportation within the country and basically consists of two major channels: the Federal-aid Highway Program and the Federal Lands Highway Program.

The Federal-aid Highway Program allocates the funds for maintaining the National Highway System (Interstate Highways, U.S. Routes and State Routes). These funds come from federal resources like gasoline taxes,  that are funneled into the respective state departments of road construction and transportation. The agency monitors the projects and then decides the qualifying projects that meet certain requirements and weigh on various standards of construction that are required to be complied with.

However, the Federal Lands Highway Program agency performs the architecture aspect of road construction, like highway design and construction services for several national parks and forest service areas.

The agency is also involved in sponsoring research of road facilities like roadway safety and traffic management, quality of construction materials used, and several methodologies involved in the construction industry. They also set up the local technical support program centers to provide research assistance to the local highway contractors.

Asphalt paving equipment on public road beside water on a sunny day

What is the Impact of the Construction Industry on the US Economy

This industry plays a pivotal role in shaping the economy of the country. The overall revenue generated from the roadway construction and design industry is close to $200 billion annually in economic activity and the industry is capable of providing 2.5 million jobs to the nation. It generates 320 billion dollars of economic activity for the nation, and most of the industries today depend on the transportation and highways network of the country.

According to the US Census Bureau data, the industry also leads to emerging businesses across the nation. Roadways and their construction support more than 1.3 million individual businesses and public agencies each year in terms of infrastructure, transportation design, and construction and management activities in the US.

Another industry that is supported by road and highway construction is the transportation and manufacturing industry,  that is a source of 3.8 million full time jobs and is a massive contributor in terms of revenue generated. The transportation manufacturing industry link goes on to jobs in tourism, transportation, agriculture, mining, forestry, construction, retailing, warehousing and wholesale industry. Therefore, the road construction industry could be called the “lifeline” of the US economy and its development.

Why is Infrastructure so Important to the US Economy?

The infrastructure sector is hugely important to the nation, it has a direct impact on public and private sectors as well as the economy and mobility. In order to continue having significant growth, some analysts highlight the value of investing in new infrastructure and its maintenance.

These construction projects positively impact the reliability and efficiency of the roads, improving complementary sectors such as transportation and tourism. Usually, public private partnerships or "PPPs" play a big role in developing toll roads in the United States.

It is common to see a private company or general contractors having cooperation with the states to improve transport facilities, national highway systems, interstate highway systems and other critical infrastructure projects such as strategic highways.

Furthermore, according to Statista, in 2018 there was an expenditure of the public sector of 92.5 billion dollars for highway construction, and it is expected to reach 103 billion in 2022. The above shows the importance of the road construction industry in economic and development terms in the United States.

Road Construction Industry Statistics for Next Years

According to a report published by IBISWorld, the highway and road construction industry could have a market size increase of 6.7% by 2021. Moreover, in 2021 the road construction sector will be in sixth place in the construction industry market.

On the other hand, they highlight that one of the opportunities for growth is the possibility of accessing a 10-year treasury note and federal financing for transportation. Finally, they assure that an increase in this financing for the transport sector can provide important opportunities for the industry.

To get full access to the report, visit IBISWorld.

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