This is our 2018 Outlook/Forecast issue, and thus it is that time of year when it makes sense to take stock of where we are and where we are going.
There is nothing we can talk about without first mentioning the 500-lb. gorilla in the room: A new federal infrastructure plan. When it happens that changes everything.
At press time, there were rumblings that the long-rumored Trump infrastructure plan calls for allocating approximately $200 billion in federal funds over 10 years and counts on states, localities and the private sector to kick in $800 billion to reach the promised $1 trillion in investment.
I was hoping for larger federal investment and an increase in the gas tax, which hasn’t been raised since 1993. Also, states, localities and the private sector already kick in a lot, so counting on multiple unpredictable state governments to pay even more is going to be a stretch.
Here is what we know: all signs are that U.S. aggregates production will be down slightly when 2017 numbers are calculated.
The U.S. transportation infrastructure market is anticipated to rebound slightly next year, following a 2.8 percent drop in 2017, according to the American Road & Transportation Builders Association’s (ARTBA) economic forecast released Nov. 30. I participated in ARTBA’s webcast. Total domestic transportation construction and related-market activity is forecast to reach $255 billion in 2018, a year-on-year increase of 3.2 percent after adjusting for project costs and inflation. The 2017 market performance is expected to come in at $247.1 billion.
Although the overall U.S. transportation infrastructure market will see modest growth in 2018, the situation will likely vary significantly by state and region, according to ARTBA Chief Economist Dr. Alison Premo Black. The market is forecast to grow in 20 states and Washington, D.C., and slow in 23 states, with the remaining seven expected to be relatively flat.
Dodge Data & Analytics also released its 2018 Dodge Construction Outlook. The report predicts that total U.S. construction starts for 2018 will climb 3 percent to $765 billion. Public works construction will improve 3 percent, slightly more than the 1 percent growth in 2017. Highways and bridges should be helped as federal funding rises to the levels called for by the FAST Act, while the environmental categories will partly reflect reconstruction efforts related to Hurricanes Harvey and Irma, the report predicted.
So the outlook is pretty good. The forecast is positive. Now we just need to let the 500-lb. gorilla out of its cage.