IBISWorld has announced the addition of a new report on the ‘Bridge and Tunnel Construction’ industry. According to the report, the industry has performed well, thanks to strong federal stimulus spending in the infrastructure development, although budget constraints were an issue for federal and state governments due to recession.
The industry will grow further as states raise their transportation investments. In addition, as governments will concentrate on replacing and renovating structurally inferior bridges and tunnels, these projects will get more funding. However, the revenue of the industry is predicted to drop at 0.3% annual average rate to $24 billion in the last five years because of weak demand during and after the economic downturn and an expected fall in public-sector spending in the development of infrastructure this year.
Deonta Smith, an industry analyst at IBISWorld, stated that the industry’s revenue is expected to drop to 5.1% in 2012 alone. The industry experienced a drop in employment over the five years to 2012 due to an increased dependence on subcontracted labor and competitive pressures. In 2012, the total number of people employed in the industry in 1,307 establishments was 57,940 when compared to 1,325 establishments in 2008 and 66,682 people in 2007.
Smith informed that increased price war for federal transportation projects and delayed private sector construction have affected the industry’s profit. Average profit of the industry has dropped from the 2007 value. However, the profit value was better when compared to other construction industries. The industry is expected to achieve a moderate growth in next year and will witness a significant growth from 2014.
Source: http://www.ibisworld.com