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Dive Brief:
- With a trifecta of revenue, profit and backlog rising in the third quarter of 2024, Granite Construction said it expects public spending on the project to remain robust through 2030 and beyond.
- The Watsonville, California contractor reported profit of $79 million, up 37% from a year ago, on revenue of $1.3 billion, up 14%. The portfolio improved to $5.62 billion, a gain of nearly 1%.
- The builder said that with only 40 percent of the Infrastructure Investment and Jobs Act funding expected to be spent by 2026, there are still years of opportunity ahead. “On the public side … we’re going to see a healthy market through ’27 and beyond, probably into 2030 and beyond,” Granite CEO Kyle Larkin said on a conference call with investment analysts on October 31. “We feel very good about the public market.”
Diving knowledge:
While that momentum helped boost the company’s bottom line, which accounts for about 75% of its public works business, Granite also reported that a handful of its projects had been pushed forward to 2025 in due to the delays of the owners.
Kyle Larkin
Permission granted by Granite Construction
“These are all owner-driven,” Larkin said. “One couple had to be told the money was delayed a month or two. We have one with a change of status, awaiting direction from the owner as to how to proceed. Another was slow to start in Texas.
Granite’s results and comments reflect a broader trend in the broader construction market, where publicly funded infrastructure projects have maintained momentum, even as privately-backed construction has struggled amid a higher interest rate environment and political uncertainty during a presidential election year.
Larkin did not specifically say that Granite’s backlog of projects were on the private side, but noted later in the call that the company was less clear about where that part of the market is headed.
“In the private market, we have a little less visibility and trust in general,” Larkin said. “We have much more confidence in the public market. We’ll see how the private market evolves.”
At the same time, he said the other side of the disparity is an opportunity to increase its share of private work, which now consists of water infrastructure services, drilling and infrastructure for mines, development of commercial sites for to data centers, construction of facilities and intermodal infrastructures. for solar installations.
“We expect continued near-term growth in line with macroeconomic trends in technology, energy and freight,” Larkin said.
