In September, there was a downturn in spending on public construction and transportation projects. But that segment of the industry could get a boost once money from the federal infrastructure bill gets out the door.
The pandemic has been a boon for home construction and remodeling, as people stuck at home decided to invest in improvement projects.
But for other segments of the construction industry, “it’s been a mixed picture,” said Ken Simonson, chief economist with the Associated General Contractors of America. He adds most commercial building has dropped off. So has construction on things like roads, bridges and airports.
But he also said passage of the Infrastructure Investment and Jobs Act is likely to turn that around.
“We’ll see a steady ramping up of public construction,” he said.
The law sets aside $550 billion for new spending on things like infrastructure improvements and maintenance.
“I think that’s very good news for highway contractors and their suppliers, whether it’s concrete, the steel for bridges for guard rails and so forth, or construction equipment,” Simonson said.
And good news for the asphalt industry, according to Jay Hansen with the National Asphalt Pavement Association.
“There is going to be a substantial increase in funding for maintaining, rehabilitating, reconstructing pavement,” he said.
Hansen’s organization projects that each state will receive more than a billion dollars in Federal Highway Administration funding through the infrastructure package.
And he said asphalt producers are ready to capitalize on that.
“Expect to see a lot of paving activity over the next few years,” he said.
The challenge for contractors will be attracting enough workers to keep up with this boom in demand.
John Sullivan heads up the Subcontractor Alliance of Mississippi. He says construction wages have stagnated while the pay in sectors like retail and hospitality have been catching up — and now skilled trade positions are especially hard to fill.
“The opportunities are there, the employers are ready, but unfortunately there’s a lot of push and pull that’s taking employees off the job,” he said.
For the infrastructure package to make a real impact, Sullivan said the industry needs to find ways to attract and train new workers.