Federal construction work delayed by recent government shutdowns should begin flowing again as soon as this spring, executives at AECOM said during the firm’s first-quarter earnings call.
The Dallas-based infrastructure firm said federal award activity slowed during the 43-day shutdown at the end of 2025, but demand did not disappear. Instead, work queued up in the background as agencies waited for clarity, which AECOM executives say has started to arrive.
“We now expect, now that there’s been a resolution, second and third quarter, we should see that pickup we’re expecting in the federal award activity to come through,” said Gaurav Kapoor, AECOM’s chief financial officer, during the call.
AECOM honed in on that improving visibility across the federal construction market during the call. For example, more than half of the $1.2 trillion Infrastructure Investment and Jobs Act funding remains unspent, meaning ample opportunity is still on the table.
Current earmarks for the surface transportation authorization are set to expire at the end of September.
“The recent passage of all key federal funding bills for fiscal 26 provides greater certainty for our clients,” said CEO Troy Rudd during the call. “Progress is accelerating for the multiyear surface transportation authorization.”
An extension would expand the transportation construction cycle, said Kapoor during the call. The package includes roadway work, in addition to environmental services and program management tied to large civil programs, he said.
“That’s going to continue to provide positive momentum for our transportation business and ancillary business lines that provide services like environment,” Kapoor said on the call.
Meanwhile, state and municipal construction budgets appear much healthier than anticipated, particularly in large markets including California, Florida and Texas, said Kapoor. Tax revenue projections for fiscal 2025 are coming in much improved compared to estimates from six to 12 months ago, he said. That should support investment at the local level too.
Program management demand, data center infrastructure
As these multiyear capital programs become available, demand for program management services will grow faster than traditional design work, said Rudd.
For that reason, Rudd added the firm is intentionally looking to expand its advisory and program management offerings alongside design. He added the goal of those services would be for it to ultimately account for roughly half of its business.
Data center work is another tailwind for infrastructure construction as a whole, according to AECOM. The ancillary effect of these artificial intelligence projects means demand will also jump for other supporting builds, said Rudd.
“Investment in the private sector is also gaining momentum. This is evident in the booming data center market, where we benefit both directly and indirectly from the infrastructure opportunities,” said Rudd during the call. “This includes water, facilities, energy and environmental services, all sectors where we lead our industry.”
Fiscal Q1 results
AECOM reported $74.52 million in profits in the fiscal first quarter, down 55.4% from $167.04 million last year. Revenue for the firm’s Q1 was $3.83 billion, down 4.6% from a year earlier, according to the earnings report.
Backlog jumped to a record high of $25.96 billion, up about 9% year over year, the firm reported.
AECOM’s Q1 drew praise from Milwaukee-based financial services company Baird for its “very strong awards” during the quarter and expectations around AI investments. All in all, the note said “results largely met expectations.”
“Net, pretty good,” wrote Andrew Wittmann, senior research analyst at Baird. “AI benefits and potential challenges still in infancy, those investments expected to build through year-end.”
