America’s infrastructure is showing its clearest signs of improvement in decades, but momentum remains dependent on sustained funding and the ability to deliver as federal investment approaches a critical tipping point, according to the American Society of Civil Engineers’ 2025 Infrastructure Report Card.
ASCE raised the nation’s overall infrastructure rating to a C from a C- four years ago, with nearly half of the 18 categories assessed improving and no sector receiving a D- for the first time since the report card was introduced in 1998. The gains reflect the early impact of the Infrastructure Investment and Jobs Act of 2021 that began distributing more funds in related federal programs.
Still, ASCE cautions that the improvements are driven mostly by short-term funding increases rather than long-term certainty, leaving aging and weather-exposed systems vulnerable to improved project delivery if investment slows after the law’s authorizations expire in 2026.
Even if current funding levels continue, ASCE estimates a $3.7 trillion investment gap over the next decade to put infrastructure systems in a good state of repair.
“Given the large amount of time it takes to study, design and complete projects, sustained investment at current or higher funding levels will be necessary for infrastructure to continue to improve,” the group said in the report.
Infrastructure is improving, but time is now of the essence
The American Society of Civil Engineers’ 2025 Infrastructure Report Card finds that US infrastructure conditions are improving overall, but gains remain vulnerable without sustained investment beyond 2026. Read the full report.
Image courtesy of ASCE
The 2025 report shows gains in several historically underperforming sectors, but progress remains uneven across interconnected systems. Ports received the highest grade, a B, while rail also improved. At the lower end, investment in stormwater and transit remained at a D grade, and roads, levees, schools and wastewater facilities posted only marginal gains.
Energy was downgraded despite record federal spending, with ASCE citing growing capacity constraints, growing demand for electrification and data centers and a delay in transmission and grid modernization related to system complexity. The downgrade underscores a broader challenge facing many sectors: investment alone does not guarantee better performance when coordination and execution capacity lag.
The divergence highlights a growing coordination risk. When improvements move at different speeds in interdependent systems, weaknesses in one network can undermine gains elsewhere.
Capital increases faster than delivery capacity
ASCE estimates that achieving and maintaining a good state of repair across the 18 infrastructure categories would require $9.1 trillion in investment from 2024 to 2033. Public and private funding is projected to reach about $5.4 trillion over that period if recent federal investment levels are maintained, leaving a $3.7 trillion shortfall.
For infrastructure owners, this gap is already shaping the sequencing, scope and bidding of projects. Agencies prioritize preserving assets in “fair condition” and defer discretionary expansion to avoid triggering more costly rehabilitation later. This preservation bias is increasingly reflected in package deals that favor rehabilitation, phased construction, and programmatic delivery rather than one-off megaprojects at once.
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ASCE also emphasizes that outcomes depend not only on federal funding but also on state, local, and utility enforcement capacity. Jurisdictions with mature capital programs and bonding authorities are better positioned to absorb infrastructure law money, while others face delays linked to staff shortages, rate restrictions or limited delivery experience.
But funding is only part of the equation. In nearly every category of infrastructure, ASCE identifies climate stress as a defining performance factor. Extreme weather events caused more than $180 billion in damage by 2024, reinforcing ASCE’s conclusion that investments in resilience, while increasing upfront costs, reduce long-term financial and operational risk.
This change is expanding the scopes, times and prices of the offers to various sectors. Life cycle cost analysis is increasingly being incorporated into financing criteria and procurement decisions, particularly for water, transport and energy assets exposed to flood, heat and wildfire risk.
The challenge is compounded by persistent labor shortages in engineering, construction and inspection roles. Although funding has increased, many owners do not have sufficient in-house staff or contractor capacity to deliver projects at scale, widening the gap between their complexity and available labor and technical resources, ASCE notes.
Less visible, but just as consequential, are persistent data gaps. ASCE found that unreliable or incomplete asset data remains common in sectors such as stormwater, levees, schools, broadband and public parks. In practice, these gaps shift risk back to owners and contractors, driving agencies toward conservative delivery strategies that limit financial exposure but slow system-wide improvement.
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The 2026 test: which grades don’t show
The report’s central warning is operational, not academic: time now matters as much as funding.
Infrastructure Act authorizations expire in 2026, but projects often require years of planning before construction begins. ASCE warns that uncertainty about when projects are offered, how they are packaged and whether they proceed could delay delivery, fragment scopes and increase long-term costs.
What the ratings don’t show is how owners are already responding to that uncertainty.
Across sectors, agencies are moving ahead with environmental reviews and preliminary design work before construction, breaking large programs into phased or programmatic contracts and prioritizing rehabilitation of “fair condition” assets over expansion projects that carry higher long-term risk.
For contractors, this change is reshaping the composition of the backlog, favoring consistent program work over one-off, one-time awards. While the approach limits risk in an uncertain funding environment, it also stretches delivery times and slows down needed system-wide improvement.
For owners, engineers, and contractors, the next two years will determine whether the current pipeline pipeline becomes durable construction or whether deferred maintenance once again becomes the dominant strategy for U.S. infrastructure systems.
