The State of American Infrastructure, Fall 2026

$543.4B

Public construction, annual rate, July 2026 (Census)

+4.5%

Public highway and street, year over year (Census)

+1.1%

Public water supply, year over year (Census)

-1.1%

Public sewage and waste, year over year (Census)

-21.2%

Manufacturing construction, year over year (Census)

+5.3%

Power construction, year over year (Census)

The Census Bureau's September 1 release put construction spending in July 2026 at a seasonally adjusted annual rate of $2,157.6 billion, 3.8 percent below July 2025. Through the first seven months of the year, $1,244.6 billion was put in place, 3.5 percent below the same period of 2025. Public construction was $543.4 billion at an annual rate, 0.2 percent below June and within the survey's margin of error of flat.

The decline is private, and it is one category. Manufacturing construction, the factory-building boom that carried 2023 through 2025, ran at $169.8 billion in July against $215.6 billion a year earlier, a fall of 21.2 percent. Nothing else moved on that scale. Public highway and street work was $150.3 billion, up 4.5 percent on the year. Public water supply was $35.1 billion, up 1.1 percent. Public sewage and waste disposal was $51.9 billion, down 1.1 percent. Power, public and private together, was $181.5 billion, up 5.3 percent. Conservation and development, the flood control and navigation category, was up 28.1 percent from a small base.

The reading: the headline decline in construction is not an infrastructure story. Public work is flat to up. The two categories with the most momentum, highways and power, are the two with the most predictable funding: formula money for one, rate-based capital plans for the other. The category with the least momentum, sewer, is the one that leans hardest on the state revolving funds, which is where the next section ends up.

Dec 11, 2026

Surface transportation programs now expire (H.R. 6500)

FY2028

Highway account of the Highway Trust Fund approaches zero (CBO)

FY2027

Mass transit account approaches zero (CBO)

~$150B

General-fund transfer a five-year House bill would need (Eno, from CBO)

The Infrastructure Investment and Jobs Act's surface transportation authorization was due to expire on September 30, 2026. It did not. The Continuing Appropriations and Extensions Act, 2027 (H.R. 6500) passed the Senate 90 to 6 on August 8, passed the House 370 to 48 on September 1, and was signed on September 2. It funds the government and extends the surface programs through December 11, 2026, most of them at prorated FY2026 levels.

What it does not do is fund the law's Division J advance appropriations. According to AASHTO, that leaves the Bridge Formula Program, the National Electric Vehicle Infrastructure formula program and the Federal-State Partnership for Intercity Passenger Rail with no FY2027 money on October 1. The American Public Transportation Association puts the effect at a 20 percent cut to transit funding and an 81 percent cut to passenger rail against current levels.

The five-year bill exists in one chamber. The House Transportation and Infrastructure Committee approved the BUILD America 250 Act (H.R. 8870), which authorizes highway, transit, safety and Amtrak programs through FY2031. House leadership then cut the September session short; the last pre-election day was September 17, and the Eno Center's read is that a lame-duck floor vote is uncertain. The Senate has not released a bill. Eno's history is worth carrying around: since the late 1990s, once Congress has extended a surface bill once, one extension has never been enough.

Behind the authorization sits the Highway Trust Fund. The Congressional Budget Office's 2026 baseline has the highway account approaching zero in FY2028 and the mass transit account in FY2027. The gap between the highway account's revenue and its outlays was about $17 billion in FY2025 and grows to $27 billion by FY2036. Eno's analysis of CBO's June baseline is that a five-year bill at the House committee's spending levels needs almost $150 billion in general-fund transfers to stay solvent through FY2031. If the account is depleted, FHWA slows reimbursements to states for completed work and reduces apportionments.

The reading: state DOTs are building their 2027 letting schedules on a ten-week extension and a trust fund with about two years left. Formula highway money keeps flowing at FY2026 rates through December 11. Discretionary and advance-appropriated programs are the ones with a hole in them right now, and the projects that depend on them are the ones to watch for delay, re-scoping or a bond issue in their place.

$574.7B

IIJA funds provided to DOT, EPA, Interior and NTIA, FY2022 to FY2025 (GAO)

76%

Obligated ($434.2B) (GAO)

41%

Disbursed, as a share of what was provided (GAO)

72% / 41%

EPA's IIJA funds obligated and outlaid, January 31, 2026 (EPA OIG)

The Government Accountability Office reviewed the four agencies that received most of the law's money. Of the $574.7 billion provided to the Departments of Transportation and the Interior, the EPA and the NTIA for fiscal years 2022 through 2025, the agencies had obligated $434.2 billion, 76 percent, and disbursed $235.6 billion, 54 percent of what was obligated and 41 percent of what was provided. The EPA's Inspector General reports the same shape for the agency's own $60 billion: 72 percent obligated and 41 percent outlaid as of January 31, 2026. Of the state and tribal assistance grants, the account that funds the revolving funds and lead line replacement, 64 percent was obligated.

An obligation is a signed agreement between an agency and a named recipient for a named purpose. A disbursement is money paid for work done. The gap between the two, roughly $200 billion at these four agencies alone, is construction that has been promised to a specific city, county, state, authority or utility and has not yet been built. The same GAO review found that after the January 2025 executive orders paused the money for review, agencies approved about 9,500 awards worth $128 billion, canceled about 800 worth $17.8 billion, and still had roughly 2,500 awards worth $33.6 billion pending a decision.

The reading: the next three construction seasons are funded by dollars that already exist and are already attached to recipients. The commercial question is not whether the money is coming. It is which owners hold it, what they have to build with it, and when they will advertise. Every one of those answers is in a public document: the grant agreement, the state transportation improvement program, the SRF intended use plan, the council agenda that accepts the award. Those documents are what Capveon reads, and the next section is where they matter most.

$625B

Drinking water needs over 20 years (EPA 7th DWINSA)

$630.1B

Clean water needs over 20 years (EPA 2022 CWNS)

54% / 64%

Share of FY2026 CWSRF and DWSRF appropriations reserved for earmarks (CRS)

1,163

Earmarked water projects, FY2026, paid directly to communities (CRS)

4 million

Lead service lines, 2025 estimate, down from 9.0 million (EPA)

Nov 1, 2027

Lead and Copper Rule Improvements compliance date (EPA)

The two federal needs surveys are the closest thing the sector has to a bill of quantities. The EPA's seventh Drinking Water Infrastructure Needs Survey puts twenty-year need at $625 billion: $422.9 billion for distribution and transmission pipe, $107 billion for treatment, $56.1 billion for storage and $25.2 billion for source. The 2022 Clean Watersheds Needs Survey puts clean water need at $630.1 billion across 17,544 treatment works serving 270.4 million people: $151.1 billion for conveyance, $115.3 billion for stormwater, $94.4 billion for nonpoint source control, $83.6 billion for advanced treatment, $74.7 billion for decentralized systems, $66.6 billion for secondary treatment and $36.5 billion for combined sewer overflow correction. The 2027 survey is being prepared now.

Against roughly $1.25 trillion of need, the base federal programs are small and, this year, smaller than they look. FY2026 appropriations for the Clean Water State Revolving Fund were $1.639 billion and for the Drinking Water SRF $1.126 billion, flat for the third year. But the Congressional Research Service notes that P.L. 119-74 reserves 54 percent of the clean water appropriation ($892.8 million) and 64 percent of the drinking water appropriation ($715.4 million) for community project funding, the earmarks, which EPA pays directly to 1,163 named recipients with a 20 percent local cost share rather than to the state funds. EPA's April allotment memo says it plainly: because Congress earmarked from the SRF appropriation again in FY2026, the SRF funding available to states decreased. The Environmental Policy Innovation Center estimates states lost $741.2 million of program set-aside capacity across FY2023, FY2024 and FY2026 as a result, whether or not they received a single earmark.

The larger issue is the year after. The law's supplemental SRF capitalization, the money that has masked the earmark effect since FY2022, runs through FY2026. Absent new legislation, FY2027 state loan pools revert to the base appropriation minus whatever Congress earmarks from it. State intended use plans for 2027, most of which publish between now and spring, will show how each state intends to handle that.

Lead is the one water program with a clock on it. After public water systems filed their first service line inventories in 2025, EPA revised its national estimate of lead service lines from 9.0 million (the 2023 update) to about 4 million. The law's $15 billion for lead service line replacement is being allotted on the new counts. The Lead and Copper Rule Improvements take effect on November 1, 2027, when systems must have baseline inventories and replacement plans in place; full replacement runs to December 31, 2037.

The reading, for a manufacturer: the replacement plans due in November 2027 are the specification pipeline for the following ten years, and they will be public. The 1,163 earmarked projects are named, funded and cost-shared today, and every one of them is subject to Build America, Buy America. For a contractor: the sewer softness in the Census data is the SRF squeeze showing up in put-in-place spending, and the 2027 intended use plans are the earliest document that will say whether it eases. For a fund: water is the sector where need is documented to the dollar and funding is decided annually in public, which is the definition of a market you can read ahead of.

$238.8B

Investor-owned utility capital spending planned for 2026, up 17% (EEI)

$1.4T

Planned 2026 through 2030, up from $1.1T for 2025 through 2029 (EEI)

55+ GW

Connected large-load projects in EEI's snapshot, about $900B of investment (EEI)

32 of 51

Utilities citing data centers as a capital driver on earnings calls (PowerLines)

1 in 6

ABC contractors under contract on a data center, a record (ABC)

Investor-owned electric utilities spent a record $204.1 billion on capital in 2025, the fourteenth consecutive record, and the Edison Electric Institute projects $238.8 billion in 2026, an increase of 17 percent, on the way to $1.4 trillion between 2026 and 2030. That five-year figure was $1.1 trillion a year ago. EEI's running snapshot of announced data center and large-customer projects stands at about $900 billion and more than 55 gigawatts of connected load.

PowerLines read the earnings calls of 51 utilities and found 32 naming data centers and load growth as a top driver of their capital plans, 28 naming resiliency and weather, and 16 naming replacement of aging infrastructure. Nine expect more than 5,000 megawatts of growth each. American Electric Power doubled its forecast to 56,000 megawatts of new demand by 2030, 88 percent of it data centers, 36,000 megawatts of it in Texas. The Census power category, public and private, was up 5.3 percent on the year in July while almost everything else private was down.

On the contractor side, Associated Builders and Contractors reports that roughly one in six of its members is under contract on a data center, the highest proportion it has recorded, and that those contractors carry 9.9 months of backlog against 8.3 months for everyone else. In July the gap was wider: 11.4 months against 7.5.

The reading: for an infrastructure contractor, the site civil, the substation, the water and cooling connections and the transmission that serve a data center are the same trades as a treatment plant, sold to a different buyer with a shorter approval cycle. For a manufacturer, switchgear, transformers, cable, pipe and valves are all in the input price table below with double-digit increases, which is what happens when one customer class absorbs supply. For a supply chain, it is the segment where lead time, not price, is the binding constraint. Rate-based utility capital plans are filed publicly, years out, with the regulator.

+8.9%

Construction input prices, August 2025 to August 2026 (BLS PPI via ABC and AGC)

+23.4%

Steel mill products (AGC)

+27.3%

Aluminum mill shapes (AGC)

+20.9%

Copper and brass mill shapes (AGC)

+77.8%

Diesel fuel (AGC)

+16.4%

Liquid asphalt (AGC)

The producer price index for inputs to construction rose 1.2 percent in August alone and 8.9 percent over twelve months; nonresidential inputs rose 8.8 percent. AGC attributes the largest increases to petroleum products and to metals under tariffs of up to 50 percent: steel mill products up 23.4 percent, aluminum mill shapes 27.3 percent, copper and brass mill shapes 20.9 percent, diesel fuel 77.8 percent at the refinery gate, liquid asphalt 16.4 percent. ABC's chief economist adds softwood lumber, switchgear and copper wire and cable to the list of inputs up more than 10 percent, notes oil back above $100 a barrel, and points at the trade dispute with Canada.

The month before tells the more important story. In July, AGC reported aluminum mill shapes up 40.5 percent, liquid asphalt up 45.2 percent and diesel up 44.2 percent. In August, asphalt was up 16.4 percent and diesel 77.8 percent. A paving bid priced in July on July's asphalt and diesel was wrong by August, in opposite directions. The level of inflation is a problem. The month-to-month swing in individual inputs is a bigger one, because that is what a fixed-price quote absorbs.

AGC's 2026 outlook survey, taken in December and January, shows how firms are handling it. About 70 percent report being affected by tariffs. Forty percent raised bid prices in response. Twenty percent added price-sharing adjustments or similar terms to their contracts. Thirty-five percent passed most or all of the cost to owners; 11 percent absorbed most or all of it. Thirty-two percent accelerated purchases and 13 percent switched from foreign to domestic producers.

Labor has not eased. Eighty-two percent of firms report difficulty filling hourly craft positions and 80 percent salaried ones, the highest shares in three years of the survey; 63 percent still expect to add headcount in 2026. A majority, 53 percent, expects craft hiring to stay hard or get harder.

The reading: the quote is the risk. The firms that put escalation or price-sharing language into contracts (one in five) kept their margin; the firms that absorbed (one in nine) gave it away. For a supply chain that prices and delivers into this market, quote validity windows, index-linked clauses and a live view of which inputs are moving are not sophistication, they are the difference between the 20 percent and the 11.

8.5 mo

ABC Construction Backlog Indicator, August 2026 (ABC)

10.0 mo

Infrastructure, up from 8.8 in July, down from 11.2 a year ago (ABC)

8.3 mo

Heavy industrial, down 2.7 months on the year (ABC)

7.5 mo

Contractors without data center work, July 2026 (ABC)

ABC's backlog indicator rebounded to 8.5 months in August from 8.0 in July, which had been the lowest reading since January; it is unchanged from August 2025. Infrastructure backlog rose 1.2 months to 10.0, the longest of the three sectors, but a year ago it was 11.2. Heavy industrial fell to 8.3 months, 2.7 months below its year-ago level, which is the manufacturing construction decline from the Census table arriving in contractors' books. Commercial and institutional backlog was 8.5 months.

The July release is the one to reread. Contractors not under contract on a data center, 88 percent of ABC's membership at the time, averaged 7.5 months of backlog. Firms with $30 million to $50 million in annual revenue reported their lowest backlog since March 2020. ABC's economist said the data center boom masks the depth of the weakness elsewhere.

AGC's members entered 2026 with what the association called dampened expectations: net optimism only for data centers and power, and rising concern about recession risk, materials costs and project financing, with owners postponing or canceling projects as financing tightened.

The reading: infrastructure is the longest backlog and it is shrinking on the year. The squeeze is on the small and mid-size firm without a data center contract, which is both a warning for that firm and a consolidation signal for anyone acquiring in the sector.

$294.9B

Municipal bond issuance, first half of 2026, a record, up 5.8% (Bond Buyer, LSEG)

~$600B

Consensus full-year 2026 forecast, against a 2025 record near $580B (Bond Buyer)

+30%

Issuance in 6 to 10 year maturities, led by new money (AllianceBernstein)

The municipal market issued $294.884 billion of debt in the first half of 2026, 5.8 percent above the previous first-half record of $278.694 billion set in 2025, according to LSEG data reported by the Bond Buyer. Forecasts for the full year have converged around $600 billion, which would beat 2025's record of nearly $580 billion and make three consecutive years of growth. J.P. Morgan's strategists list the drivers: the expiration of federal fiscal stimulus, historically deferred infrastructure and maintenance, data centers, climate resiliency, regulatory compliance and capacity. One strategist's summary, quoted by the Bond Buyer, is that after two years of waiting for rates to fall, issuers have accepted that delaying critical projects costs more than borrowing at today's rates.

AllianceBernstein notes that the growth is in the intermediate part of the curve, with six to ten year issuance up 30 percent year over year and led by new-money financing, while 21 to 30 year and 30-plus year issuance fell 19 and 25 percent. Water is in the flow: a $2.4 billion Aquarion Water Authority deal in Connecticut was among the largest of July.

The reading: a new-money bond is the document trail before the bid. The official statement lists, by name and amount, the projects the proceeds will fund, and it publishes months before any of them advertises. For a fund, the same statement is a public disclosure of a customer's capital program, credit and rate covenants.

C

ASCE 2025 Report Card, up from C- in 2021, highest since 1998 (ASCE)

$9.1T

Investment needed 2024 through 2033 to reach good repair (ASCE)

$3.7T

Gap at current funding levels, up from $2.59T in 2021 (ASCE)

$4.4T

Gap if federal funding snaps back to pre-2021 levels (ASCE)

The American Society of Civil Engineers' 2025 Report Card graded the country's infrastructure a C, up from C- in 2021 and the highest mark since the report began in 1998. Grades across 18 categories ranged from a B for ports to a D for stormwater and transit; eight categories improved and, for the first time since 1998, none was rated D-. ASCE counts more than 60,000 projects funded by the infrastructure law.

ASCE estimates $9.1 trillion of investment is needed from 2024 through 2033 to bring all 18 categories to a state of good repair, against $5.4 trillion of expected public and private investment if Congress holds recent funding levels, leaving a $3.7 trillion gap. If federal investment returned to pre-2021 levels, ASCE's Bridging the Gap study puts the shortfall at $4.4 trillion, with $5 trillion of lost economic output over twenty years.

The reading: the grade improved because the money arrived. The next report card is graded on what Congress does between now and December 11 and on the FY2027 appropriations that follow.

80

Public sources Capveon reads continuously

~1.5M

Records in the corpus, September 2026

~33,000

Agencies named in the record

~92,000

Vendors named in awards

50

States whose SRF intended use plans are read

Capveon reads about 80 public sources continuously: federal award and spending systems, every state's SRF intended use plans, state DOT and e-procurement portals, the council and board agenda platforms most cities and counties publish through, and the capital plans, budgets and specifications those bodies post. As of September 2026 the corpus holds roughly 1.5 million records: about 575,000 contract awards, 433,000 funding allocations, 389,000 out-for-bid notices, 2,600 capital plans and 134,000 rules and notices, naming about 33,000 agencies and 92,000 vendors. A record is a document read, not a deduplicated project, and an award, an allocation, a bid and a plan are different money at different stages of the same job. None of them is summed here.

Three things in that record are worth more than any single statistic above.

Capital plans are the rarest document and the earliest. There are roughly 200 award records in the corpus for every capital plan record. The same job appears as a line in a plan, then a funding action, then a bid, then an award, and the further along that sequence a document is, the more copies of it exist and the more people are reading it. Almost the entire industry reads the last two.

Most bid notices publish no number. Of the roughly 389,000 out-for-bid records, the large majority carry no engineer's estimate or budget; the ones that do sum to about $52 billion. The dollar size of the near-term market is not in the bid notice. It is in the capital plan and the funding action that preceded it, which is also where the owner's name, the engineer of record and the funding source are.

The earmark list is a project list. The explanatory statement to the FY2026 appropriations act names 1,163 water projects, their recipients and their amounts. Every one is funded, cost-shared and subject to Build America, Buy America, and it was public months before any of them advertised. The same is true of every SRF intended use plan, every state transportation improvement program and every adopted capital improvement plan. Reading them is not a research project. It is a data entry problem, and it is the one Capveon exists to remove.

For contractors. Bid the obligated money. The recipients of roughly $200 billion of committed, unspent federal infrastructure funds are named in public agreements, and their advertising dates are in their capital plans and agendas. Carry escalation or price-sharing language on anything with steel, aluminum, asphalt or diesel in it; one firm in five already does and it is the difference between the 8.9 percent input inflation landing on the owner or on you. Treat 10 months of infrastructure backlog as the average, not the floor; a year ago it was 11.2.

For manufacturers. Two dated pipelines: the lead service line replacement plans due November 1, 2027, and the 1,163 FY2026 earmarked water projects already funded. Both carry Build America, Buy America, which means 55 percent domestic component cost for manufactured products, melt-to-coat domestic production for iron and steel, and a waiver only when domestic sourcing raises the whole project's cost by more than 25 percent, after public comment. Have the certification ready before the specification asks for it. Watch waiver notices: they are public, they name products, and they tell you where a competitor could not comply.

For supply chains. The month-to-month swing in a single input (asphalt from plus 45 to plus 16 percent, diesel from plus 44 to plus 78) is the risk a fixed quote absorbs. Shorten validity windows, index the volatile lines, and know which of your inputs sit under a 50 percent tariff and which of your customers are working on federally funded projects with domestic-content rules. In power, lead time is the constraint before price; the utilities' five-year capital plans are filed with regulators and can be read.

For private equity. Infrastructure has the longest backlog of any construction sector and it is shrinking year over year, with the pressure on firms under about $50 million of revenue that have no data center work. That is a consolidation signal. Water and power capital programs are documented to the dollar, decided in public and multi-year, which makes them underwritable from the record. Under 8.9 percent input inflation and 82 percent craft-hiring difficulty, the margin in a portfolio company is in its estimating, its contract terms and its change-order discipline, all of which live in the systems the company already runs and none of which are read together today.

Federal statistics are cited to their agency release and date. Industry figures are cited to the association that published them and the month of the survey. Capveon corpus figures are counts of documents read as of September 2026, rounded, and are described as records rather than projects because the same job appears in several document types. Dollar figures from different record types are never summed. Readings are the authors' and are separated from the figures they read. Corrections go to hello@capveon.ai and are noted at the top of the piece when made.

Cite as: Capveon Research, The State of American Infrastructure, Fall 2026, capveon.ai/report.