Strong pipeline of infrastructure construction projects in the United States

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The United States construction industry is facing major headwinds due to persistent labor shortage problems. This coupled with the rising cost of materials and other macroeconomic factors, including the surge in interest rates, has dampened the growth of the construction sector in the United States in 2022. While the impact of the macroeconomic environment along with rising material prices is expected to impact the growth from the short to medium-term perspective, the strong pipeline of infrastructure construction projects will support the growth recovery in the United States. For instance,

• The long-delayed, US$16 billion infrastructure project, which includes repairing the existing Amtrak tunnels under the Hudson River as well as constructing two new track tunnels has received the go-ahead. Notably, construction activities at the Hudson River are expected to begin in the fall of 2024, with a projected completion date in 2035. The infrastructure project is one of the important construction projects in the country to modernize the Northeast Corridor.
• In November 2022, New York City Governor also announced that the construction activities at the US$4.2 billion Terminal 6 at JFK Airport will begin in early 2023. Notably, the financial investments have been secured for the first phase of construction activities of the infrastructure project. The privately funded infrastructure project will be completed in two different phases, with the completion expected in 2028.

In 2017, the Port Authority announced the US$18 billion transformation of the JFK Airport. However, the global pandemic outbreak resulted in a hold on the construction project. The Terminal 6 construction is the final of the four segments that have been kicked off. The other elements of the transformation plan include a US$9.5 billion Terminal 1 expansion, a US$1.5 billion Terminal 4 expansion, and a US$400 million Terminal 8 modernization.

The United States has been spending increasingly on various projects, including railways, roadways, and airport infrastructure construction over the last few years, and the trend is expected to further continue from the short to medium-term perspective. For instance,

• In November 2022, Superior Construction, the Florida-based infrastructure contractor, announced that it had landed a multi-million contract from the Department of Transportation. According to the firm, Superior Construction landed a US$112.5 million contract to complete improvement to the I-295 and U.S. 17 in Northeast Florida. Along with this, the firm is also undertaking the repair activities of the I-4 and Daryl Carter Parkway interchange. Notably, the firm is planning to complete the improvement and repair work by late 2024.
• The New York City Department of Transportation also awarded a US$167 million Williamsburg Bridge rehab project to Skanska USA, the US division of the Swedish-based contractor. The firm announced that it began work on the project in October 2022 and is expecting to get it completed by December 2025. The project includes structural steel repairs, including floor beams, intermediate towers, and trusses.

The on-hold construction projects are also being revived in the country, which is also expected to support the industry revival in Q4 2022 and H1 2023. For instance,

• In November 2022, construction activities at the US$2.4 billion Los Angeles Metro Purple Line also began in the United States. Notably, the infrastructure construction project was shut down in October 2022 due to safety reasons. The resumption of construction activities is, therefore, expected to support the growth of the construction industry in the United States in Q4 2022.

All of these infrastructure construction projects are expected to keep assisting the revival of the construction sector, which is currently facing severe headwinds due to material price rise and inflation. However, the macroeconomic environment, coupled with the labor shortage issue is expected to remain an ongoing concern for the United States construction industry from the short-term perspective.

To know more and gain a deeper understanding of the construction industry in the United States, click here.