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Transportation Construction Market
UpdateAlison Premo Black, PhD
ARTBA Senior VP & Chief Economist
September 25, 2018Pennsylvania Highway Information
AssociationTransportation Conference
© 2018 ARTBA. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, without prior written permission of ARTBA.
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Source: ARTBA analysis of Census Bureau’s U.S. Value of Construction Put in Place, adjusted for project costs. © 2018 ARTBA. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of ARTBA.
Real Value of U.S. Highway & Street Construction Work – Rolling 12-month Totals
$70.5 (Dec 2009)
$53.9 (Nov 2013)
$60.3(July 2018)
$40
$45
$50
$55
$60
$65
$70
$75
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Billi
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8$
Decreases in 2018:-5% from July 2017,-15% from 2009 peak
Real Market Decline: -24% peak to trough
2
Source: ARTBA analysis of Census Bureau’s U.S. Value of Construction Put in Place, adjusted for project costs. © 2018 ARTBA. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of ARTBA.
Real Value of U.S. Bridge Construction Work – Rolling 12-month Totals
$31.9
$20
$22
$24
$26
$28
$30
$32
$34
$36
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
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7$
Small Contraction in 2018:-1% from July 2017
3
$7.9
$7$7$7$7$8$8$8$8$8
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
2014 2015 2016 2017 2018
Billi
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8$Real Value of Transit Construction Work,
Rolling 12-month Totals
$11.4
$0$2$4$6$8
$10$12$14$16
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
2014 2015 2016 2017 2018
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Real Value of Railroad Construction Work, Rolling 12-month Totals
$20.6
$0
$5
$10
$15
$20
$25
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
2014 2015 2016 2017 2018
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Real Value of Airport Construction Work, Rolling 12-month Totals
$2.5
$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
Jan
May Sep
2014 2015 2016 2017 2018
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Real Value of Port & Waterway Construction Work, Rolling 12-month Totals
Source: ARTBA analysis of Census Bureau’s U.S. Value of Construction Put in Place, adjusted for project costs. Data through July 2018. © 2018 ARTBA. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of ARTBA.
4
Federal Transportation Investment
$46.4
$40.3
$41.3
$42.0
$39
$40
$41
$42
$43
$44
$45
$46
$47
FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020
Billi
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Federal Aid Highway Program FAST Act Obligations
Nominal Obligations Adjusted for Project Costs Adjusted for Inflation
Source: ARTBA analysis of the FAST Act. Project costs are expected to grow in line with historical averages according to the ARTBA price index, which takes into account changes in material prices, industry wages and overall inflation. Inflation forecast of 2% from CBO's August 2015 report An Update to the Budget and Economic Outlook: 2015 to 2025.
$52.0 $53.0 $54.0 $55.0 $56.0 $57.0 $58.0 $58.0 $60.0 $61.0 $62.0
$41.0 $41.0 $41.0 $42.0 $42.0 $41.0 $41.0 $41.0 $41.0 $41.0 $40.0
$3.0
$19.0 $19.0$22.0 $22.0 $24.0
$0
$10
$20
$30
$40
$50
$60
$70
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
Billi
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lars
Total HTF outlays Proj. HTF revenues Shortfall after FAST Act transfers spent
Source: Congressional Budget Office Highway Trust Fund baseline, April 2018
Total may not add up due to rounding.
Highway Trust Fund Revenue Crisis Will Return
Developments in State & Local Funding
8
Pennsylvania State Highway & Bridge Program Revenue Mix Has Changed Over Time
39%Highway
User Fees, Tolls & Taxes, $3.9B
Other State
Revenues*, $1.8,
18%
Bonds, $2.4B, 24%
Federal Investment $1.9B,
19%
2016State Highway Program Revenues
*Other state revenues include the state General Fund, sales taxes, local government reimbursement and other imposts.Source: Federal Aid Highway Statistics, Table SF-1
Highway User Fees,
Tolls & Taxes,
$2.9B, 72%
Other State
Revenues*, $220M,
6%
Bonds, $2M, <1%
Federal Investment,
$900M, 22%
2000State Highway Program Revenues
Pennsylvania State Highway & Bridge Program Spending Mix Has Changed Over Time
Capital Outlay, $4.9B, 38%
Maintenance, $4.5B, 35%
Admin & Research, $0.5B, 4%
Law Enf., $0.8B, 6%
Grants, $0.4B, 3%
Bonds, $1.9B, 14%
2016
Source: Federal Aid Highway Statistics, Table SF-2
Capital Outlay, $2.3B, 55%Maintenance,
$1.1B, 27%
Admin & Research, $0.2B, 4%
Law Enf., $0.4B, 9%
Grants, $0.2B, 5%
2000
Pennsylvania State Highway & Bridge Capital Outlays
$1.9$2.3
$2.7 $2.6 $2.8
$1.9 $2.1 $2.3 $2.6 $2.7
$3.6
$4.6$5.1
$3.5 $3.2$3.9 $3.8
$4.9
$0
$1
$2
$3
$4
$5
$6
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
State Spending on Construction, Right of Way Purchases, Planning & Design
Source: ARTBA analysis of data from Highway Statistics table SF-2. © 2018 ARTBA. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, withoutprior written permission of ARTBA.
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31 States & DC Have Increased Motor Fuel Related Taxes 51 Times Since 1997
AK
WA
OR
CA
ID
MT
WY
NV
AZ
CO
NM
ND
SD
NE
KS
OK
TX
MN
IA
MO
WI
IL
MI
IN
KY
TN
MS AL
OH
NY
PA
VA
NC
GA
FL
ME
WV
AR
UT
HI
SC
VT
CTRI
DENJ
MDDC
NH
MA
LA
Approved 2013-2017 Approved Prior to 2013
Source: TIAC™ State Funding Initiatives Report, Sept. 2018
One Bill Approved
AK
WA
OR
CA
ID
MT
WY
NV
AZ
CO*
NM
ND
SD
NE
KS
OK
TX
MN
IA
MO*
WI
IL
MI
IN
KY
TN
MS AL
OH
NY
PA
VA
NC
GA
FL
ME*
WV
AR
UT
HI
SC
VT
CT*RI
DENJ
MDDC
NH
MA
LA*
States Approving Transportation Funding Legislation 2015-2018
Two Bills Approved
Includes transportation funding increases and legislation related to funding, including lockboxes, P3 authorizations, ending diversions, task force or study, pilot program, etc.
Three or More Bills Approved
* Measure pending voter approval
Voters Approve $4.25B in Transportation Funding – Nov. 7
#ARTBATIAC
Source: ARTBA TIACTM Research, Updated November 9, 2017.
#ARTBATIAC
Transportation Funding Ballot Measures Approved
Measures identified as of July 9, 2018
Statewide
AK
WA
OR
CA *
ID
MT
WY
NV
AZ
CO
NM
ND
SD
NE
KS
OK
TX
MN
IA
MO
WI
IL
MI
IN
KY
TN
MS AL
OH
NY
PA
VA
NC
GA
FL
ME
WV
AR
UT
HI
SC
VT
CTRI
DENJ
MDDC
NH
MA
LA *
2018 Transportation Funding Ballot Measures
Local
* Both statewide and local issues
Potential Measure
Number of States Making Mid-Year Budget Cuts
4139
19
811
8
14
1922
0
5
10
15
20
25
30
35
40
45
FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017
Source: National Association of State Budget Officers, Fall 2017
12-Month Rolling Totals – State & Local Contract Awards
$46.1$42.3
$44.0 $45.4
$54.8
$48.1$50.3
$54.1
$16.2 $16.4$18.7
$22.4 $20.5
$16.3$18.1
$21.1
$0
$10
$20
$30
$40
$50
$60
Aug 10-July 11
Aug 11-July 12
Aug 12-July 13
Aug 13-July 14
Aug 14-July 15
Aug 15-July 16
Aug 16-July 17
Aug 17-July 18
Aug 10-July 11
Aug 11-July 12
Aug 12-July 13
Aug 13-July 14
Aug 14-July 15
Aug 15-July 16
Aug 16-July 17
Aug 17-July 18
Highways Bridges
Source: ARTBA analysis of data from Dodge Data & Analytics, adjusted with the ARTBA Price Index for project costs. © 2018 ARTBA. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of ARTBA.
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18
12-Month Rolling Totals – State & Local Contract Awards
$1,731
$2,267
$1,703
$2,096$2,137
$1,098$1,165$1,310
$1,496
$1,166
$63.2 $18.8 $67.4 $46.2 $14.3$0
$500
$1,000
$1,500
$2,000
$2,500
Aug 13-July 14
Aug 14-July 15
Aug 15-July 16
Aug 16-July 17
Aug 17-July 18
Aug 13-July 14
Aug 14-July 15
Aug 15-July 16
Aug 16-July 17
Aug 17-July 18
Aug 13-July 14
Aug 14-July 15
Aug 15-July 16
Aug 16-July 17
Aug 17-July 18
Pennsylvania
Highways Bridges Transit
Source: ARTBA analysis of data from Dodge Data & Analytics, adjusted with the ARTBA Price Index for project costs. © 2018 ARTBA. All rights reserved. No part of this document may be reproduced or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of ARTBA.
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19
