A report by The Freedonia Group forecasts asphalt used in highways and streets could increase 3.3 percent per year to reach 13.7 million tons by 2021, citing expectations of increased construction activity and more government funding.
The report, “Paving Asphalt Market in the U.S.,” expects total “paving asphalt products” used in total applications to reach 21.9 million by 2021, with a 3.4 percent annual growth rate.
Freedonia specifically calls out increased gas taxes recently passed to help fuel the growth, and expects California’s recent gas tax increase to gather $5 billion per year for highway projects. The organization says California is the “most intensive user of paving asphalt products” in the U.S.
“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,” the group reports.
In addition to states, Freedonia says 2015’s FAST Act will help drive the growth, in addition to improvements in “nonresidential and repair” projects.