Dive summary:

• Highway contractors, helped by an unusually warm first month of the year, put 4% more work in place this year than they got done in January of 2012, but the American Road & Transportation Builders Association (ARTBA), which analyzed federal data, said it remains to be seen whether that is the start of a recovery.
• The highway construction sector lost 4% in 2012 from what it built in 2011, ARTBA's chief economist, Alison Premo Black, noted, and uncertainty in federal funding is one large pothole it could encounter in trying for a comeback this year.
• States are cutting back, and the rigid sequestration law that took effect this month cuts federal spending below levels set in the MAP-21 program – though Democratic senators have backed a plan that would give administrators flexibility in where the cuts land, helping transportation.

From the article:

[S]tates have recently been obligating federal dollars at a good pace, [but] contract awards for highway projects have been down, and nearly half the states are pulling back on their programs.