Historic Low Asphalt Prices Mean Infrastructure Investment is ‘On Sale’
As oil prices have continued to fall, state Departments of Transportation are now encountering the lowest costs for road-paving asphalt since the 2008-09 recession. This downtrend in construction materials costs has infrastructure investment advocates saying that now is one of the best times in decades for states and the federal government to boost project funding.
The lower cost for the oil-based construction material comes as states are getting ready to tap into the modestly higher federal funding levels Congress approved for highway programs under the five-year FAST Act authorization of the Highway Trust Fund.
Boosting investment in infrastructure now would allow agencies to take advantage of these record low costs, garnering a much higher value out of transportation spending — as opposed to embarking on projects when the costs of basic materials are on the rise again.
In effect, some say, infrastructure investment is on sale and states could improve highways and other transportation systems at low cost now through projects that will reap rewards in the future by boosting commerce and mobility for decades to come.
A number of state agencies track asphalt prices and publish indices that show monthly prices going back many years. States across the nation are currently publishing asphalt prices that have not hit such lows since 2009.
The most recent figures published on the California DOT’s Paving Asphalt Price Index show that the price of asphalt dropped significantly from 2014 to 2015 — from a high of $583 per ton in March 2014, down to almost half that at $253 per ton in Feb 2015. According to the index archives, the price of asphalt in California has been consistently higher than that since April 2009.
The California index does not offer data after March 2015, but more recent data from other state’s DOTs show the same trend: the Georgia DOT lists a current base asphalt price that is at its lowest since November 2009 and, according to the Ohio DOT’s January 2016 figures, the price of asphalt in that state has not been lower since October 2009.