Dive Brief:
- Infrastructure projects totaling more than $9.6 billion have been delayed or canceled in the midst of the COVID-19 pandemic, according to a report released by the American Road & Transportation Builders Association (ARTBA).
- Sixteen states announced project delays or cancellations worth approximately $5 billion, while another 20 local governments and authorities have scratched or put off projects worth another $4.54 billion, the report asserts.
- In addition, at least 44 states, transportation authorities and local governments have projected declining revenues. While that doesn’t mean transportation programs will necessarily feel the same percentage impact of those declines, it does point to increased pressure on transportation-related revenue sources, as well as state and local budgets, according to the report.
Dive Insight:
The report underlines an important area in which the lagging impacts of COVID-19 are just now starting to emerge in construction’s numbers, while contractors increasingly worry about the potential of a sagging economy to shelve new projects.
The 16 states ARTBA highlighted as having delays or cancellations include:
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Florida
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Georgia
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Hawaii
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Kentucky
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Massachusetts
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Mississippi
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Missouri
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Nevada
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New Mexico
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North Carolina
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Ohio
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Pennsylvania
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Vermont
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Washington
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West Virginia
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Wyoming
The news, which comes amid a resurgence of virus outbreaks in multiple states nationally, has only added to the anxiety infrastructure contractors were already feeling about an increasingly grim funding environment.
“We don’t have a road building member that isn’t very nervous about the foreseeable future when it comes to how much work they have,” said Brian Turmail, vice president of public affairs at the Associated General Contractors of America (AGC).
He said that beyond public infrastructure projects, many road builders take on private projects funded by businesses that have also been hit hard.
“Most road builders don’t just work on public projects,” Turmail said. “They also do paving for everything from distribution centers to shopping malls. A lot of our guys are telling us their private sector work has dried up, too, so they’re kind of getting hit from both sides.”
Overall heavy and civil engineering construction employment total fell 10% in April, according to AGC chief economist Ken Simonson, slightly less than the 14% drop for all of construction. But while total construction employment rebounded 8% in May and June, heavy and civil employment increased just 3% in May before dropping 1% in June.
That dip could reflect "the wrap up of projects that had been accelerated earlier in the spring and cancelations of work that is normally awarded in May and June," Simonson said.
On July 20, the American Association of State Highway and Transportation Officials (AASHTO) asked Congress for an “immediate infusion” of $37 billion to offset losses at state departments of transportation related to the COVID-19 pandemic.
The dire economic and funding data came while Congress struggled to come to consensus on a second broader round of COVID-19 relief funding, even as previous assistance packages passed this spring began to expire.
Indeed, the American Society of Civil Engineers (ASCE), in an effort to urge Congress to pass a COVID-19 infrastructure relief package, released a map July 29 highlighting about 50 projects that are ready to be built, but still need funding.
“At a time when people are confined to their homes, need jobs and with low interest rates for project funding, we have an opportunity to fast-track construction, but America is stuck until Congress acts,” ASCE president K.N. Gunalan said in a statement.
In one bright spot for infrastructure contractors, Illinois Gov. Jay “J.B.” Pritzker recently unveiled a $21.3 billion, five-year infrastructure plan to improve 3,356 miles of roadway and 8.4 million square feet of bridge deck in the state, according to Transport Topics. Just under $2.8 billion is earmarked for year one of the initiative.
