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Federal construction work delayed by recent government shutdowns should be flowing again as soon as this spring, AECOM executives said during the company’s first-quarter earnings call.
The Dallas-based infrastructure company said Federal awards activity it slowed during the 43-day shutdown at the end of 2025, but demand did not disappear. Instead, the work queued in the background while the agencies waited for clarity, which AECOM executives say has begun to arrive.
“Now we wait, now that there has been a resolutionsecond and third quarter, we should see the pick-up that we expect in federal award activity to occur,” Gaurav Kapoor, AECOM’s chief financial officer, said on the call.
AECOM refined this improved visibility into the federal construction market during the call. For example, more than half of the $1.2 trillion in funding from the Jobs and Infrastructure Investment Act remains untapped, meaning there is still ample opportunity on the table.
Current reservations for surface transport authorization expire at the end of September.
“The recent passage of all key federal funding bills for FY26 provides greater certainty for our customers,” CEO Troy Rudd said on the call. “Progress Accelerating for Multi-Year Surface Transportation Authorization.”
An expansion would extend the transportation construction cycle, Kapoor said on the call. The package includes road work, in addition to environmental services and program management tied to major civil programs, he said.
“This will continue to provide positive momentum to our transportation business and ancillary business lines that provide services such as environment,” Kapoor said on the call.
Meanwhile, state and municipal construction budgets look much healthier than expected, especially in big markets like California, Florida and Texas, Kapoor said. Fiscal year 2025 tax revenue projections are improving greatly compared to estimates six to 12 months ago, he said. This should also support investment at the local level.
Demand for program management, data center infrastructure
As these multi-year capital programs become available, demand for program management services will grow faster than traditional design work, Rudd said.
For this reason, Rudd added that the company is intentionally looking to expand its advisory and program management offerings alongside design. He added that the goal for these services would eventually be about half of his business.
Data center work is another tailwind for infrastructure construction as a whole, according to AECOM. The ancillary effect of these AI projects means that demand will also increase for other supporting constructions, Rudd said.
“Private sector investment is also gaining momentum. This is evident in the booming data center market, where we benefit both directly and indirectly from infrastructure opportunities,” Rudd said on the call. “This includes water, facilities, energy and environmental services, all sectors where we lead our industry.”
Results of the first fiscal quarter
AECOM reported profit of $74.52 million in the first fiscal quarter, down 55.4% from $167.04 million last year. The company’s first-quarter revenue was $3.83 billion, down 4.6% from a year earlier, according to the earnings report.
The backlog jumped to a record high of $25.96 billion, up 9% year over year, the firm reported.
AECOM’s first quarter drew praise from Milwaukee-based financial services firm Baird for its “very strong earnings” during the quarter and expectations for AI investments. All in all, the note said, “results largely met expectations.”
“Clean, pretty good,” wrote Andrew Wittmann, senior research analyst at Baird. “AI’s benefits and potential challenges are still in their infancy, with these investments expected to build through the end of the year.”
