For contractors, the answer likely lies in whether or not you are getting in on publicly funded work related to manufacturing and infrastructure. In contrast to strong gains in these sectors, work in the commercial and residential sectors has seen contractions. Read on for a snapshot of the action and tips on bidding and winning more too.
Prediction: Modest Overall Growth
Pointing out that the construction industry continues to split, the chief economist for Dodge Construction Network, Richard Branch, forecasts 2023 will see overall growth, driven by infrastructure and manufacturing. Construction Dive shares these specific insights from Branch:
While construction in manufacturing and infrastructure report strong activity, the private sectors of the building market are posting worrying signs, as they struggle under the weight of higher interest rates, tightening lending standards and declining demand….
“Public dollars are flooding into the manufacturing and infrastructure sectors, leading to significant growth over the last year. Meanwhile, the mostly private sectors of the building market like offices, multifamily and retail are struggling.”
“The second half of the year is shaping up to be a challenging one … .But, the insulation provided by manufacturing and infrastructure starts will stabilize the industry and lead to modest overall growth.”
Good To Know: Public Project Highlights
According to Dodge: “Street and bridge projects, bolstered by public funding, jumped 22% in May, while utility and gas plant starts boomed 53% over the month. For the 12 months ending in May 2023, nonbuilding starts posted 30% growth compared to the previous year.” Major starts in May 2023 included:
- The $5.3 billion train for the Port Arthur LNG project in Port Arthur, Texas.
- The $1.5 billion Southeast Connector Interchange highway project in Fort Worth, Texas.
- The $925 million Amtrak/Metro Norwalk Bridge Replacement project in Norwalk, Connecticut.
Construction insiders observe that the impact of federal funding from the Infrastructure Investment and Jobs Act (IIJA) has just begun to be evident, in real time in the marketplace. With roads and bridges representing the biggest area of effort, The Department of Transportation (DOT) is administering the lion’s share of the infrastructure funding. However,many other agencies are involved in awarding contracts for a diversity of infrastructure projects, including: the Federal Communications Commission which is overseeing broadband infrastructure; the Environmental Protection Agency, which is focused on water infrastructure; the Department of Energy, which is upgrading the electric grid, including EV charging stations; and, the Department of Commerce which is overseeing “regional innovation strategies and entrepreneurship.”
As you follow the flow of money for builds in your region, don’t forget that federal funding from the Elementary and Secondary Emergency Relief (ESSER) allocations has spurred ambition in school districts across the country. Commitments are being made on projects that would ordinarily be nearly impossible to tackle. Find out more about school builds–and the timing on the funding here.. Additional tips on growth strategies, including bidding more, are right here. Remember, Colonial Surety is ready to help builders grow too,with The Partnership Account® for Contractors. Get free insights and financial scores just for completing the pre-qualification.
Once qualified, The Partnership Account® provides builders with a surety line of credit—in writing—and a private digital dashboard. Use it to access real time financial intel, including a day to day snapshot of single and aggregate limits and current and available bond capacity. Go ahead: update work on hand and increase your aggregate. Got a special opportunity coming along? Let’s connect—that’s what partners are for, right?
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