Highway, Street & Bridge Construction Contractors
Description
Companies in this industry construct highways, streets, roads, airport runways, sidewalks, and bridges. Major companies include AECOM, Bechtel, Granite Construction, and Kiewit (all based in the US), as well as Bouygues Construction and VINCI (both based in France), China Communications Construction Company (China), and Webuild (Italy).
Other than the US, China, India, and Mexico are among the countries with the largest roadway systems, according to Visual Capitalist. As economies grow in these countries, highway systems and related infrastructure also will expand. China, for example, spend about $44.6 billion though investments and $43.7 billion through contracts, according to GreenFDC.
The US highway, street, and bridge construction industry includes about 10,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $130 billion.
COMPETITIVE LANDSCAPE
Demand is largely driven by the availability of government road building funds, population growth, and the need to replace or repair aging infrastructure. The profitability of individual companies depends on operating efficiencies and the ability to correctly estimate costs. Big companies have the resources and engineering skills necessary for large construction jobs. Small companies can compete effectively by bidding for smaller projects or by working as subcontractors on large projects. The US industry is highly fragmented, with the top 50 companies accounting for about 30% of industry's revenues.
PRODUCTS, OPERATIONS & TECHNOLOGY
Highway, street, and related work construction, accounts for about 40%, followed by construction services for maintenance and repair, and additions, renovations, and alterations account both for about 15% each.
Streets and highways consist of several different layers of materials, earth and various grades of gravel on the base layers. Paved roads have cement or asphalt on the top layers. The typical street or highway has a gravel base and several layers of asphalt. (An asphalt street is officially called a "bituminous roadway.") A minimum pavement thickness of either a 4-inch full depth asphalt or 3-inch asphalt concrete over a granular base is recommended for most roads. A heavily used highway, like the Capital Beltway encircling Washington DC, has 5 to 6 inches of asphalt concrete lying on a concrete slab 8 to 9 inches thick.
Asphalt is a mixture of sand, gravel, or rock, asphalt cement, and various additives. Sand and gravel (called "aggregate") make up over 90% of the asphalt, according to R.V. Plant. Asphalt cement (AC - sometimes called bituminous cement) is the black substance left over when crude oil is distilled into gasoline and other liquid products, according to Perdue Pavement Solutions. Asphalt is made up as "hot mix asphalt" (HMA) in a special mixing facility where the paving aggregates are dried and heated, and then mixed with melted asphalt cement. The HMA is transferred to silos for short-term storage and delivered by truck to the worksite. Some construction companies operate their own HMA facilities, but most buy their asphalt from independent operators.
Most construction jobs specify the type and amount of aggregate and asphalt cement to be used. (The federal system for specifying asphalt quality is called Superpave.) At the worksite, HMA is loaded into a paving machine that actually lays down the surface. Rollers then smooth and compact the surface as the HMA cools. The prices for construction materials such as asphalt and oil are volatile and subject to sudden fluctuations.
Reconstruction of asphalt roads involves grinding off the top layer and replacing it. The ground up old pavement, called reclaimed asphalt pavement (RAP), can be added to HMA to form new asphalt. More than 94 million tons of RAP was recycled into new mixes in 2021, according to the National Asphalt Pavement Association.
Construction companies may own some core pieces of heavy equipment (trucks, backhoes, paving machines, and rollers) and may lease other pieces as needed from third party suppliers, depending on the type of work. Construction companies rely on suppliers to provide equipment in a timely manner for successful completion of a project. Many companies also do other kinds of construction work such as driveways, parking lots, sidewalks, foundations, concrete and masonry work to efficiently use their assets and skills.
Other than the US, China, India, and Mexico are among the countries with the largest roadway systems, according to Visual Capitalist. As economies grow in these countries, highway systems and related infrastructure also will expand. China, for example, spend about $44.6 billion though investments and $43.7 billion through contracts, according to GreenFDC.
The US highway, street, and bridge construction industry includes about 10,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $130 billion.
COMPETITIVE LANDSCAPE
Demand is largely driven by the availability of government road building funds, population growth, and the need to replace or repair aging infrastructure. The profitability of individual companies depends on operating efficiencies and the ability to correctly estimate costs. Big companies have the resources and engineering skills necessary for large construction jobs. Small companies can compete effectively by bidding for smaller projects or by working as subcontractors on large projects. The US industry is highly fragmented, with the top 50 companies accounting for about 30% of industry's revenues.
PRODUCTS, OPERATIONS & TECHNOLOGY
Highway, street, and related work construction, accounts for about 40%, followed by construction services for maintenance and repair, and additions, renovations, and alterations account both for about 15% each.
Streets and highways consist of several different layers of materials, earth and various grades of gravel on the base layers. Paved roads have cement or asphalt on the top layers. The typical street or highway has a gravel base and several layers of asphalt. (An asphalt street is officially called a "bituminous roadway.") A minimum pavement thickness of either a 4-inch full depth asphalt or 3-inch asphalt concrete over a granular base is recommended for most roads. A heavily used highway, like the Capital Beltway encircling Washington DC, has 5 to 6 inches of asphalt concrete lying on a concrete slab 8 to 9 inches thick.
Asphalt is a mixture of sand, gravel, or rock, asphalt cement, and various additives. Sand and gravel (called "aggregate") make up over 90% of the asphalt, according to R.V. Plant. Asphalt cement (AC - sometimes called bituminous cement) is the black substance left over when crude oil is distilled into gasoline and other liquid products, according to Perdue Pavement Solutions. Asphalt is made up as "hot mix asphalt" (HMA) in a special mixing facility where the paving aggregates are dried and heated, and then mixed with melted asphalt cement. The HMA is transferred to silos for short-term storage and delivered by truck to the worksite. Some construction companies operate their own HMA facilities, but most buy their asphalt from independent operators.
Most construction jobs specify the type and amount of aggregate and asphalt cement to be used. (The federal system for specifying asphalt quality is called Superpave.) At the worksite, HMA is loaded into a paving machine that actually lays down the surface. Rollers then smooth and compact the surface as the HMA cools. The prices for construction materials such as asphalt and oil are volatile and subject to sudden fluctuations.
Reconstruction of asphalt roads involves grinding off the top layer and replacing it. The ground up old pavement, called reclaimed asphalt pavement (RAP), can be added to HMA to form new asphalt. More than 94 million tons of RAP was recycled into new mixes in 2021, according to the National Asphalt Pavement Association.
Construction companies may own some core pieces of heavy equipment (trucks, backhoes, paving machines, and rollers) and may lease other pieces as needed from third party suppliers, depending on the type of work. Construction companies rely on suppliers to provide equipment in a timely manner for successful completion of a project. Many companies also do other kinds of construction work such as driveways, parking lots, sidewalks, foundations, concrete and masonry work to efficiently use their assets and skills.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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