We asked industry experts about the future of public sector work
Diana S. ParksDiana S. Parks

Diana S. Parks

Partner
Doresy & Whitney LLP

President Trump has recently honed in on the insurmountable issue with federal participation in U.S. P3 projects. For many years, the administrations of this country have acknowledged that we need a more efficient system for the environmental process in order to bring our country’s infrastructure back to order, but, to date, the measures put in place (under prior administrations) have not made an impact, due largely to the typically narrow focus of such initiatives to a select number of projects.

President Trump has committed to rehabilitate the federal environmental process for all projects and sectors. The bench of experienced staff President Trump selected to lead our nation’s infrastructure policy and economic initiatives is a resounding signal that we are going to see improvements in the near future. I’m optimistic about the coming year for our industry.

Bob MurrayBob Murray

Bob Murray

Chief Economist
Dodge Data & Analytics

As shown by the construction start statistics compiled by Dodge Data & Analytics, the volume of public works construction starts has essentially plateaued from 2014 through the present year, holding at a level of about $125 billion per year. In 2016, highway and bridge construction starts retreated 11 percent, following a 13-percent jump in 2015 that reflected the start of such projects as the $2.3 billion Interstate 4 upgrade in the Orlando, Florida, area. Environmental public works, also settled back last year with a 5-percent decline.

One recent bright spot has been miscellaneous public works. The pattern that emerged in 2016 has held up so far during the initial months of 2017. Highway and bridge construction starts have slipped further, although passage of fiscal 2017 federal appropriations in early May could help raise activity, since it brings federal funding up to levels called for by the FAST Act. Environmental public works have also receded so far this year. The growth in early 2017 has been shown by pipeline work, including the start of such projects as the $4.2 billion Rover natural gas pipeline and the $2.5 billion Mariner East 2 Pipeline that will transport propane and other natural gas liquids.

Another pipeline project that may start soon is the upper Midwest portion of the Keystone XL Pipeline. In January, President Trump signed an executive memo that makes it easier for TransCanada to construct the Keystone XL pipeline. He also signed an executive order to speed up environmental reviews for “high priority infrastructure projects,” which may prove to be a plus for infrastructure projects in 2017. Still to come are the specifics for the $1 trillion infrastructure program. The 2018 budget proposal calls for $200 million in federal money over 10 years to spur additional funding from nonfederal sources, with $5 billion in funding designated for 2018. In May, the Trump administration released a document citing several main principles for the program, including to encourage more funding from states and localities, and to draw increasingly on private sources.