Demand for paving asphalt used in highways and streets is forecast to advance 3.3% per annum to 13.7 million tons in 2021, aided by increases in government funding and rising highway and street construction activity. Demand for paving asphalt products in these applications is primarily driven by government funding for highway and street construction, which accounts for 97% of nonbuilding paving asphalt demand. These and other trends are presented in Paving Asphalt Market in the US, a new study from The Freedonia Group, a Cleveland-based industry research firm.
Legislation created a favorable funding environment for highway maintenance. In addition, many states are considering legislation to increase fuel excise taxes, which help fund highway projects. In April 2017, California, the nation’s most intensive user of paving asphalt products, approved a tax increase of 12 cents per gallon, which is expected to raise over $5 billion every year for highway projects. More favorable economic conditions will boost overall tax revenues used to fund paving projects; additionally, many legislative bodies will approve direct funding mechanisms -- such as grants or bond issues -- to allocate additional capital for such projects as road construction and highway repair and rehabilitation.
Demand for paving asphalt products in all applications is forecast to advance 3.4% per annum to 21.9 million tons in 2021. Factors driving growth include the passage of the Fixing America’s Surface Transportation (FAST) Act; efforts by state governments to increase infrastructure budgets and fuel taxes; rising highway, street, and other nonbuilding construction activity; and strong gains in nonresidential improvement and repair activity.
Paving Asphalt Market in the US (published 06/2017, 141 pages) is available for $5500 from The Freedonia Group. For further details or to arrange an interview with the analyst, please contact Corinne Gangloff by phone 440.684.9600 or email [email protected].
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