Report Overview
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Demand for precast concrete infrastructure products is projected to increase 8.1% per year to $5.9 billion in 2026. Gains will be driven by a significant influx of federal funding for road construction and other infrastructure products, as well as by ongoing trends away from traditional site-poured concrete in favor of precast products. By using precast products, project managers can reduce the time of projects and the need for more highly skilled labor, shortages of which continue.
The Infrastructure Investment & Jobs Act Will Boost Demand
Precast concrete product demand will be bolstered by the Infrastructure Investment & Jobs Act, which was passed in late 2021 and allocates $1 trillion (over eight years) for a wide array of infrastructure-related projects around the US. Many of these projects – including the renovation of bridges, railroads, roads, highways, public utility structures, and water and sewage facilities – will provide opportunities for precast concrete manufacturers.
Roads & Bridges Will Remain the Largest Application for Precast Concrete Products
Roads and bridges will remain the leading outlet for precast infrastructure products due to the nation’s massive stock of bridges, highways, and roads. Beyond the mere size of the US roads system, many of roads and bridges are far past due for repair, upgrade, or outright replacement, which will create significant market opportunities for products such as paving slabs and bridge components.
Precast Products Offer a Number of Advantages Compared to Competitive Options
The outlook for precast concrete infrastructure products is robust. While precast concrete products are generally more expensive than alternatives, they offer a number of advantages that allow them to effectively compete with other products, which include both manufactured infrastructure elements made of other materials and site-poured concrete.
Compared to other materials – such as plastic water handling products, metal pilings, and wood fencing – precast products offer much greater strength and durability. These performance characteristics give precast concrete products a strong competitive edge in infrastructure applications, where it is critical that construction products perform to their standards for extended periods of time.
Precast concrete products also benefit from their ability to save both time and labor costs. Poured-in-place concrete has long dominated in construction applications and will continue to do over the long term due its lower cost and familiarity among contractors. However, more project managers are becoming familiar with the advantages that precast products can offer, and more will continue to use these products at the expense of site-poured concrete, particularly in larger and time-sensitive projects or where labor shortages are of immediate concern.
Historical Market Trends
Demand for precast concrete generally tracks construction expenditures because most precast concrete products are sold to the construction industry. However, transportation construction spending also heavily influences precast concrete product demand since they see use in a wide variety of infrastructure applications – including roads and highways, bridges, railway systems, ports, and more. This segment has been heavily impacted by federal infrastructure funding, such as the FAST act, which funded transportation infrastructure spending between 2015 and 2020.
Other nonbuilding construction spending also impacts precast concrete demand for products used in utility structures as well as water and sewer systems.
Demand for precast concrete is also impacted by competitive products made from alternative materials:
- In structural applications, precast concrete competes primarily with poured-in-place concrete, which has advantages like lower initial cost and widespread contractor familiarity. However, precast concrete has been gaining share from poured-in-place concrete, driven in part by growing acceptance of the long-term performance benefits of precast concrete as well as its easier installation process.
- In other applications, precast concrete products compete with a much broader spectrum of materials. In both siding and fencing, for instance, precast concrete products contend for market share against materials that are lower cost (vinyl or wood composite, for instance) or offer stronger aesthetics (like brick). In these applications, precast concrete products also gain share due to their durability and ease of installation.
Infrastructure Spending Outlook
The infrastructure market is a key application for precast concrete products, accounting for a significant share of overall precast concrete demand. Such products are used in a variety of infrastructure applications, including:
- roads and bridges
- water and sewer systems
- electric utilities
- railroads
- marine structures
- airports
The infrastructure market for precast concrete differs from the others in that demand is not driven by market forces, but by trends in government spending. In times of economic turmoil, state and local governments can be forced to reduce spending on infrastructure products, which can, in turn, negatively impact the precast concrete industry. The federal government will sometimes step in to fill those funding gaps, both to take care of the country’s infrastructure and to attempt to stimulate a stagnating economy.
Going forward, while non-federal infrastructure spending growth is expected to be limited, project funding will be substantially bolstered by the federal government – specifically through the Infrastructure Investment and Jobs Act, which was passed in late 2021. This law both fills a void left by the recently expired FAST Act (which funded road and highway infrastructure) and significantly expands upon it, allocating over $1 trillion for a wide array of projects that fall under the larger banner of “infrastructure”. Many of these will impact precast concrete demand, such as those concerning roads, bridges, passenger and freight rail, clean water, port infrastructure, and airports.