CIC - Construction Intelligence Center

US infrastructure construction to grow steadily to $396bn by 2022

3 Sep 2018

The US infrastructure industry is expected to grow steadily from $326.6 billion in 2017 to $396 billion in 2022 (in nominal value terms), corresponding to a 3.9% annual average growth rate, according to GlobalData.


States and local governments are pushing for higher gas tax and user fees in order to increase revenues for public works, while the Trump administration is seeking to harness private capital to take advantage of government spending on infrastructure at the federal, state and local levels.


However, higher interest rates, rising material costs, and shortage of labor present downside risks to the expansion of the industry. Trump’s pledge to tear up unfavorable trade deals and curb illegal immigration could result in limited imports and higher construction material prices and further exacerbate the scarcity of labor in the construction industry. 


In addition, the large tax cuts signed into law last December could increase the costs of infrastructure financing by reducing the appeal of municipal bonds, which are the largest source of infrastructure financing for state and local governments.


In February 2018, the White House released its infrastructure budget proposal, under which the Trump administration seeks to provide $200 billion over the next ten years to spur a projected $1.5 trillion in state, local government, and private sector investment to rebuild what Trump called ‘America’s crumbling infrastructure’. However, the proposal has not yet been approved by congress and it remains uncertain whether it would ever pass through.


GlobalData is currently tracking 1,421 large-scale infrastructure projects in the US in both the public and private sectors, at all stages from announcement to execution; collectively, these projects are worth $1.2 trillion. 


The electricity and power sector account for the largest share of the project pipeline value at $422.9 billion; this is followed by rail projects valued at $405.8 billion; airport and other infrastructure projects with $182.0 billion, road projects which make up for $110.9 billion and water and sewerage projects valued at $86.8 billion.