US demand for asphalt for use in paving roads and highways looks set to grow and will reach 13.7 million tonnes/year by 2021. That is the finding of a report by the
According to the report, the market for asphalt for road building will grow at around 3.3%/year until it hits 13.7 million tonnes/year by 2021. Freedonia says that this growth in the market will be assisted by increases in government funding and rising highway and street construction activity. The market for paving asphalt products is driven largely by government funding for highway and street construction. These and other trends are presented in the report, ‘Paving Asphalt Market in the US’, a new study from The Freedonia Group.
According to Freedonia, legislation has now delivered a strong basis 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, which is expected to raise over US$5 billion/year for highway projects. Improvements in economic conditions will boost overall tax revenues used to fund paving projects. In addition 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.
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 non-building construction activity; and strong gains in nonresidential improvement and repair activity.