Highway construction costs continue to rise

Nov. 28, 2023
Driving higher prices were construction component costs for concrete, grading/excavation and asphalt.

Funding for highway construction projects continues to see impacts from inflation of construction component costs for concrete, grading/excavation, asphalt, as well as labor costs.

The cost of highway projects rose 53.8% in the first quarter of 2023 from $2.86 billion in the fourth quarter of 2020, according to recent data from the Federal Highway Administration (FHWA).

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For two decades the FHWA has published a National Highway Construction Cost Index, using data on bids from state highway building projects measuring information from the viewpoint of buyers. The average price charged for materials such as steel, asphalt, labor costs, and profit is calculated for each item in each state and combined into a national index. 

The NHCCI reached a new all-time high in the first quarter of 2023; increasing 2.7% from the previous quarter. The second quarter of 2022 (11.9%) grew faster than any other quarter in this 2.5-year span.

Highway construction costs rose steadily in the first three months this year, part of an upward trend extending back through the previous 10 quarters.

Driving higher prices this year were construction component costs for concrete, grading/excavation and asphalt.

According to an analysis of the data by an FHWA economist, constuction material input prices might not have been the only factor driving prices. “Labor, transportation or price markup may be driving that portion of the cost increase as opposed to the cost of the material itself."

Source: Transport Topics


About the Author

Harlee Hewitt

Harlee is associate editor for Construction Equipment. She has a Bachelor's in English with a focus on technical writing.