Contractors don’t have 20/20 vision for the year ahead and there are some legitimate reasons for that. Keep on reading to learn more.
It appears as if uncertainty will once again reign in 2020 for the road building industry. Lack of funding certainty, the skilled worker shortage, tariff impacts and more are all weighing heavily on the minds of construction business owners.
What we can’t give you to help ease the struggle is a crystal ball. Instead, each December we talk to industry experts about what they see coming down the road for the year ahead in hopes that it helps you better prepare for what to expect.
While contractors may have apprehension for the year ahead, experts say there’s reason to stay positive.
“We believe that 2020 will be another strong year for asphalt producers and highway contractors,” Ed Mortimer, vice president, transportation infrastructure for the United States Chamber of Commerce says. “Federal funding remains stable and more state and local governments continue to move forward with critical transportation projects. We believe this trend will continue.”
See what else contractors expect in 2020 from experts that represent all facets of the road building industry.
Federal Funding Not Secured, but There’s Hope
2019 has provided some guaranteed dollars and states are starting to pick up the tab as well, helping to keep work going, even without a federal infrastructure package. What remains in question however is if Congress will put policy before politics and enact long-term legislation for infrastructure funding and secure the Fixing America’s Surface Transportation (FAST) Act before it runs out.
Audrey Copeland, president, National Asphalt Pavement Association (NAPA): We are looking toward reauthorization of federal surface transportation
Audrey Copeland, president, National Asphalt Pavement Association (NAPA)
programs in the middle of what is certain to be a high-stakes election cycle. Congress still has time to enact a surface transportation reauthorization bill before the FAST Act expires on September 30, 2020, which is just weeks before Election Day. Passage of a multiyear surface transportation bill would provide certainty for highway agencies to plan and budget for projects, but for that to happen lawmakers will need to come together and agree to move forward with a plan.
The Senate Environment and Public Works Committee has approved a bipartisan five-year reauthorization bill, America’s Transportation Infrastructure Act of 2019, that boosts highway spending by more than 27% above the FAST Act funding levels. The National Asphalt Pavement Association (NAPA) has been urging Senate Majority Leader Mitch McConnell to bring the legislation to the Senate floor for a vote as well as for the House Transportation and Infrastructure Committee to start drafting its own legislation.
Without strong signals from Washington that federal funding will not be disrupted or diminished, we are likely to see states adopt a conservative approach to new project starts, which could take some larger projects off the table for 2020. At the same time, many states and localities are doing what they can to raise additional local funds for transportation. This helps them maintain their infrastructure networks, but it is no substitute for federal action.
Alison Premo Black, senior vice president, policy & chief economist at the American Road & Transportation Builders Association (ARTBA): Congress has also acted to increase federal transportation investment through the annual appropriations process, providing over $10 billion in supplemental funding for the federal-aid highway, transit and airport improvement programs in FY 2018 and 2019. Additional funding is also expected in FY 2020. This increase is in addition to what states receive under the FAST Act and the Airport Improvement Program and has helped support significant transportation construction market growth in 2019.
The fact that the EPW Committee is proactively moving forward with a reauthorization of the federal highway program more than a year before it expires is noteworthy.
Mortimer: While the Trump infrastructure plan has stalled in congress, we continue to see solid federal funding and legislative action on surface transportation reauthorization. The Senate Environment and Public Works Committee approved on a 21-0 vote for the America’s Transportation Infrastructure Act (S. 2302). While the bill includes a 27% increase in federal highway investment over the next five years it also creates, for the first time, a national bridge program and incentives state DOT’s to build infrastructure that is resilient to changing climate conditions.
To move the bill to the full Senate, the Banking, Commerce and Finance Committees must move their parts of the bill. The key will be the Finance Committee, which has to identify $110 billion in new funding over five years to pay for the ATIA. We continue to push Senate leaders to come together with a package that can be approved by the Senate by the end of 2019 or early 2020. With 2020 being a Presidential election year, we believe there should be a sense of urgency to finish work on the bill and have a bill sent to President Trump in early 2020. Any later and the possibility of extending the surface transportation bill (or FAST Act) becomes greater. It took 32 extensions to complete the last surface transportation bill so to prevent a repeat, we will be launching an all-out advocacy and grassroots effort to remind members of Congress of the urgent need for action.
Arniban Basu, chairman and CEO of Sage Policy Group: Americans don’t seem to agree on much these days, but one thing they manage to agree upon is the need to step up infrastructure investment. Accordingly, infrastructure is especially fertile ground for bipartisanship. This past July, the Senate Environment and Public Works Committee introduced a $287 billion funding reauthorization bill that would pick up where 2015’s FAST Act left off, providing funding for the next five years. The Highway Trust Fund is set for insolvency in 2021, so this is likely one of the very few things that gets done next year.