The COVID-19 pandemic caused travel to decrease by 50 percent globally, with the top 10 most impacted cities in the world seeing a decline of 80 percent in road travel. But post-pandemic aviation surged—up 37 percent in 2023 compared to 2022. Flight volume is forecasted to surpass pre-pandemic demand and reach a new all-time high of 40.1 million global flights in 2024 (see chart).
Considering this return to travel and the spike in projected demand, the need has arisen for airports to review their aging infrastructure. According to the Airports Council International–North America, terminals in the United States are on average almost 50 years old. Aging infrastructure, coupled with new federal investment, means opportunities for engineers. The Airport Infrastructure Grants program allocates $25 billion toward terminal expansions, baggage system upgrades, and runway safety enhancements.
The Federal Aviation Administration is awarding $970 million to 114 airports and $187 million in grants for modernization efforts (see below for a list of the top 10 airports by total initial funding available in fiscal year 2024). A statement released in May by the U.S. Department of Transportation quotes Transportation Secretary Pete Buttigieg: “The funding we’re announcing today will help 91 airports make critical upgrades to improve travel and further modernize our aviation infrastructure.”
Post-pandemic consumer demand, aging infrastructure, and an influx of federal funding aren’t the only drivers in the aviation industry. Technological advancements aimed at improving the customer experience will also drive global airport investment to reach $2.4 billion by 2040, at a compound annual growth rate of 14.4 percent.
Local developers from the Washington, D.C., metro area shared insights about real estate development at the Land Development Coalition (LDC) roundtable during ACEC’s Annual Convention & Legislative Summit in May. The panelists—Lerner’s Vice President of Development Jim Policaro, Gilbane’s Senior Vice President of Development Robert Gilbane Jr., and Redbrick LMD’s Executive Vice President of Construction Paul Elias—agreed on these top trends:
Office-to-residential conversions are often not financially feasible.
The education sector is booming due to aging infrastructure from the 1970s.
They are always looking to engineers for ways to save money on projects.
Spending in the education sector, which includes K-12 and higher education, increased 19 percent or $38 billion (including public and private spending) in the first four months of 2024, up from $32 billion in 2023, according to the latest U.S. Census Bureau Value of Construction Put in Place Survey. More information on this survey can be found in the latest Market Intelligence Dashboard, which can be accessed at www.acec.org/market-intelligence-dashboard.
Investment growth in the sector is also forecasted for the next five years, including a 15 percent increase from $127 billion in 2024 to $146 billion by 2028, according to an FMI Q2 2024 report. This increase in investment can be attributed to aging infrastructure in schools and campus housing, renovation investments, Inflation Reduction Act funding, modernizing networks, artificial intelligence, and local bond measures.
ACEC members were able to network with these potential clients in an intimate setting and ask questions. One member asked the developers if they would start hiring engineers that are one-stop shops, with the ability to perform all design, construction, and financing. The labor shortage in both the engineering and construction fields isn’t new. Even as the ACEC Research Institute continues its work around its Firm of the Future initiative, it remains an unsettled question what that firm will look like. That said, the developers responded in unison that they would not take on engineers as staff. They noted that while they appreciate the work that engineers do and respect them as experts in their field, the line of demarcation is such that developers must remain experts in theirs.
Dewberry Senior Vice President Mike Snyder moderated the panel, which also covered mass timber; environmental, social, and governance (ESG); sustainability goals; and the latest technologies. To be a part of the next Land Development Coalition meeting or any coalition with ACEC, head to www.acec.org/member-center/get-involved/coalitions.
ACEC now offers an interactive dashboard that analyzes data from the U.S. Census Bureau’s monthly Value of Construction Put in Place surveys. This data can be broken down by public and private spending as well as by market. For stakeholders in the engineering and construction industry, this survey provides crucial information on the state of design and construction activity and spending in the U.S. It also helps them understand market trends and make informed business decisions. For more information on the dashboard, visit: www.acec.org/market-intelligence-dashboard.
The Private Side column in Engineering Inc. focuses on the markets listed above, and information and insights on economic data relevant to the industry. For more on these topics, subscribe to ACEC’s quarterly Market Intelligence Briefs: https://www.acec.org/resources/market-intelligence/#newsletter.
Diana O’Lare, CPSM, is ACEC’s director of market intelligence. She can be reached at dolare@acec.org.
