US: transportation infrastructure investment gap widens (June data) / by Federico Villalobos

On August 1st, 2017, the U.S. Census Bureau released the construction spending statistics for the month of June. In terms of public infrastructure transportation (roads, bridges, ports, airports, railways, mass transit), spending continues to indicate a widening investment gap. 

 Source: Own construction based on U.S. Census Bureau.

Source: Own construction based on U.S. Census Bureau.

Investment decline by 7% yr/yr

In June 2017, public investment in transportation projects (seasonally adjusted annual rate) declined to $110 billion (-7.0% versus $119.3 in June 2016) despite a negative yr/yr rate of -5.8% reported in June 2016.  Breaking down by goverment level, state & local construction spending was $107.6 billion (-7.5% versus $116.4% in June 2016), while federal investment increased to $3.3 billion (+12.6% versus $2.9 billion in June 2016). 

 Source: Own construction based on U.S. Census Bureau.

Source: Own construction based on U.S. Census Bureau.

Investment gap widens to 0.9% of GDP

Relative to gross domestic product (GDP), investment reached 0.58% (versus 0.64% in June 2016). The Global Infrastructure Hub (GIH) and the American Society of Civil Engineers estimates the United Stated should invest in the transportation sector approximately 1.5% of GDP per year.  Thus, investment gap is now at a new high of 0.92% of GDP.

 Source: Own construction based on U.S. Census Bureau.

Source: Own construction based on U.S. Census Bureau.

The United States faces the challenge to upgrade and expand its transportation system. The Trump Administration has promised a US$1 trillion investment plan. No details have been revealed. If you are interested in more information please review  the "5 quick facts about US infrastructure investment needs article".