US infrastructure spending to fall this year

Forecasting company IHS Global Insight has warned that infrastructure spending in the US is expected to fall -4.3% this year, despite the country's stimulus package. Deficits at state level and funding shortfalls at a municipal level are blamed for the decline.

Over the longer term, IHS Global Insight expects a further -1.6% drop in infrastructure spending in 2010. This will be followed by a +2.4% rebound in 2011 as tax revenues increase at a state level and the full effects of the stimulus package are felt.

The company went on to say that if it was not for major projects in the power sector, including several new oil refineries and pipeline construction, infrastructure spending would be down -6.9% in the US this year. With the exception of power, IHS Global Insight expects spending in all infrastructure sub-sectors to fall this year.

The biggest downturn is expected to be seen in (non-road) transportation infrastructure, with spending down -10.2% this year. Investment in sewage and waste disposal is expected to drop -6.5% while highway and street construction will be down -5.5%.