Infrastructure deficits spark contractor opportunities

In March the American Society of Civil Engineers (ASCE) released its 2025 Report Card for America’s Infrastructure, awarding an overall grade of C—an improvement from a C-minus in 2021, but an indication that the U.S. still has barely scratched the surface of what is needed to effectively maintain and improve the nation’s infrastructure.

ASCE evaluated 18 infrastructure categories based on factors such as current and future capacity, physical condition, funding levels and gaps, regulatory compliance, public safety, resilience, and innovation. The findings paint a picture of strained systems, aging assets and limited investment. The organization estimates a funding gap totaling $3.7 trillion from 2024 to 2033 if federal funding remains flat. 

State and local governments accounted for 79% of transportation and water infrastructure spending in 2023, according to the U.S. Congressional Budget Office, yet many are not prepared to meet the challenge of keeping roads and bridges in good repair.

A July 2025 report by The Pew Charitable Trusts found that 33 states expect to miss at least some of their targets for roadway and bridge conditions or maintenance funding over the next decade. Only 11 states are on track to meet both goals. The rest lack sufficient data for a clear outlook, which is an issue in itself. For example, much of the data focuses only on federally funded National Highway System assets, excluding non-NHS infrastructure. 

Merriam-Webster defines infrastructure as the system of public works of a country, state or region—a definition that speaks directly to its role as the backbone of the economy. That connection has real consequences: U.S. underinvestment in infrastructure will cost the average household $3,300 a year by 2039, according to ASCE.

Poor infrastructure doesn’t just mean potholes and delays. It erodes productivity, restricts the movement of goods and people, increases risk, and limits competitiveness. Aged electrical grids, fragile water systems, and constrained port and transit capacity all hamper economic performance and national security. Infrastructure also affects the pace of artificial intelligence adoption, limiting energy scalability and data center deployment.

The upside is that the scale of these infrastructure challenges presents a massive opportunity for construction contractors that are prepared to meet them. As federal, state and local governments stretch limited resources across mounting needs, successful contractors will be those that bring sophistication, compliance and productivity to the table and excel in a variety of areas.

Mastering compliance and funding

Contractors that want to bid on government contracts must navigate a maze of evolving regulations and funding requirements. Projects tied to the Infrastructure Investment and Jobs Act require prevailing-wage adherence, workforce development and domestic material sourcing. The U.S. Department of Defense now mandates that certain contractors comply with the Cybersecurity Maturity Model Certification.

And new initiatives such as the White House’s American AI Action Plan signal the availability of more funding, as well as more complexity and urgency. Staying competitive means participating in trade associations that offer up-to-date guidance, hiring attorneys and consultants who are familiar with these regulations and developing systems to track regulatory changes.

Closing the labor gap

Associated Builders and Contractors forecasts the need for 439,000 net new construction workers in 2025 and 499,000 in 2026. It warns that failing to meet that need may accelerate already high construction costs and reduce the volume of financially feasible work. Contractors should consider establishing internship programs, workforce development programs, employee ownership models and flexible benefits to attract and retain talent.

Managing materials and costs

Tariffs and supply chain disruptions have made materials sourcing more critical than ever. Contractors must develop robust procurement strategies and adopt best practices for navigating price and availability fluctuations.

Leveraging data and technology

Data is the engine of effective technology use. When properly accessed, governed and protected, it enables faster, smarter decisions. Technology helps contractors manage compliance, boost labor productivity and safety, and optimize materials and other limited resources. A smart starting point is to evaluate the effectiveness of enterprise resource planning systems and project management software in assessing business planning and profitability.

These systems and software facilitate a more financially healthy and nimble construction firm. With this foundation in place, firms can build a culture of innovation that uses AI, wearables, drones and robotics to solve specific challenges and drive measurable growth.

The outlook

The U.S. infrastructure challenge is as daunting as it is urgent. But for construction firms, it is also a moment of unprecedented opportunity. Prepared and innovative firms that invest in people, process, data and technology can thrive amid continued uncertainty and play a pivotal role in revitalizing the U.S. economy.