Rock Products

JAN 2018

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24 • ROCK products • January 2018 www.rockproducts.com Industry Analysis state revenues, continue to cause a drag on the overall U.S. transportation infrastructure market. The bright spots of the transportation construction market continue to be airport terminals, public transit, Class 1 railroads and private driveway, street and parking lot construction associated with residential and commercial developments. These markets saw real market growth in 2017, and are forecast to continue growing in 2018. Among the findings in Black's forecast: Public and Private Highway, Street and Related Construction • The real value of public highway, street and related work by state DOTs and local governments – the largest market sector – is expected to increase a modest 2.4 percent in 2018 to $58.1 billion after falling 6.4 percent to $56.8 bil- lion in 2017. • Six highway-related public-private partnership (P3) proj- ects came to financial close in 2017, totaling over $7.5 billion in investment. • Work on private highways, bridges, parking lots and drive- ways will increase from $62.4 billion in 2017 to $63.3 billion in 2018, and will continue to grow in the next five years • Overall, highway program contract awards are up in 13 states compared to a three-year historical average, down in 26 states and Washington, D.C., and within a 5 percent range up or down in 11 states. Bridges and Tunnels • With some major projects, such as the New NY Bridge and Ohio River Bridge reaching conclusion, the pace of bridge work has slowed. •  The public bridge and tunnel construction market is expected to increase slightly in 2018, to $31.3 billion. • Work in 2017 is expected to be $30.5 billion, down from $33.1 billion in 2016. Railroad, Subway and Light Rail •  Public transit and rail construction is expected to grow from $20.3 billion in 2017 to $21.3 billion in 2018, a 4.6 percent increase. •  Subway and light rail investment is expected to reach a new record level, increasing from $7.7 billion in 2017 to $8 billion in 2018. Airport Terminals and Runways •  Airport terminal and related work, including structures like parking garages, hangars, air freight terminals and traffic towers, is expected to increase from $11.7 billion in 2017 to $13.4 billion, a 14 percent increase. • Runway work, which has been down the last few years, is forecast to increase from $3.6 billion in 2017 to $4.1 billion in 2018. Ports and Waterways • The value of port and waterway investment is expected to remain flat at the $1.8 billion level. • Construction activity in 2017 was down from $2 billion in 2016 and $2.4 billion in 2015. Momentum Going Forward The Dodge Momentum Index surged again in November, climbing 13.9 percent to 149.5 (2000=100) from the revised October reading of 131.3. The Momentum Index is a monthly measure of the first (or initial) report for nonresidential building projects in planning, which have been shown to lead construction spending for nonresidential buildings by a full year. The November increase was the second month of strong gains after a four-month period of softness. November's advance was the result of healthy gains in both the commercial and institutional sectors. From October to November, the commercial portion of the Momentum Index advanced 19.6 percent, while the institu- tional portion grew 5.5 percent. On a year-over-year basis, the Momentum Index is now nearly 21 percent higher, with the commercial portion up 24 percent and the institutional side up 17 percent. The turnaround in October and November suggest that building activity should continue to expand in 2018. In November, 21 projects each with a value of $100 million or more entered planning. For the commercial building sector, the largest projects include a $300 million mixed-use facility

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