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Summer is in full swing, but for the construction industry, an autumn deadline is already circled in red.
Congress has until Sept. 30 to renew the nation’s transportation bill as the current $1.2 trillion Infrastructure Investment and Jobs Act nears the end of its authorization period.
The bill is key for the construction sector as infrastructure projects have helped offset weakness several segments of private construction for much of this year. Out of the data center construction boomeconomists say the public infrastructure sector remains one of the only stalwarts of reliable construction activity.
Found a survey from Associated General Contractors of America 78% of American voters We want Congress to pass Build America 250, the name of the new transportation reauthorization bill. The July 2 poll polled more than 10,000 voters nationwide, in partnership with Morning Consult.
But any delay or legislative derailment on a new transportation bill in the coming months could add to uncertainty about the future of the infrastructure construction industry, said AGC CEO Jeffrey Shoaf.
“They don’t have a lot of time to pass it if they pass it,” Shoaf said during a July 2 media conference. “Congress seems to be following the path of least resistance. They can’t get away with being oblivious to this. They can’t get away without addressing such an important cog in our economic growth in the country.”
The multiyear federal bill provides about 80 percent of the funding for major transportation projects, Shoaf said. Without that money, contractors across the country would be forced out of business.
“If federal funding is reduced or doesn’t keep pace with growth and inflation, our projects will be delayed,” Lynn Hansen, CEO of Crowder Constructors, a general contractor based in Charlotte, North Carolina, said during the briefing. “Construction jobs will be put at risk.”
Some notable multi-billion dollar infrastructure projects in the sector include the Gateway Development Commission $16 billion Hudson Tunnel Project in New York and New Jersey and the Chicago Transit Authority $2.1 billion Red and Purple Line Modernization. Both projects recently won court victories where a judge ordered the US DOT to restore funding after President Donald Trump’s administration withheld funds for the work.
While the pending sunset of the IIJA adds urgency to the situation for contractors, it also won’t turn off the funding tap completely.
For example, even if Congress doesn’t pass a bill by the Sept. 30 deadline, funding already authorized under the IIJA will continue to flow, said Associated Builders and Contractors chief economist Anirban Basu.
“There are a handful of other construction segments that are doing reasonably well in terms of demand for contractor services, and a lot of that is related to the IIJA,” Basu said during a July 8 economic update webinar. “The money is still to be spent. That money will last us maybe into the early 2030s, so there’s that.”
However, Basu agrees that a new transportation bill is key to preserving the momentum in infrastructure construction and offsetting weak private construction elsewhere.
“Some of these publicly funded segments are holding up well, but basically on the private side, as far as I can tell, it’s data centers and energy,” Basu said. “There’s not much else that’s flying high right now.”
