Challenges in the Road Construction Industry Despite Growth

The road infrastructure industry is undergoing global growth while facilitating the growth of connected industries. Road construction and infrastructure companies contend with some challenges despite ensuing growth.

FREMONT, CA: Road networks continued to expand worldwide during the first decade of the 21st century, despite a lack of financing and severe criticism from environmentalists. New road infrastructure and associated transportation activities will create jobs, benefit social welfare, and spur economic growth. In developing countries, the number of roads will increase by 25 million by 2050.

Research shows that road transportation contributes 3 to 5 percent of the global gross domestic product (GDP), the highest share among all modes of transportation.

As the value of road transportation and construction increases, it becomes more important to address some of its challenges.

Financing road construction projects: The construction of major road links and motorways propels development and growth. It is difficult to finance road construction projects, especially in developing countries, with a negligible return rate. Toll motorways present a different challenge for financing construction projects, but this challenge still exists. Toll motorways are traditionally profitable investments, but funding may be scarce or nonexistent in times of recession. A powerful economy can efficiently address this problem, but a weaker economy will have difficulty finding financing sources for road construction projects, which are crucial to economic growth.

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