Dive Brief:
- With a trifecta of revenue, profit and backlog all increasing in the third quarter of 2024, Granite Construction said it expects public project spending to remain robust through 2030 and beyond.
- The Watsonville, California, contractor reported $79 million in profit, a 37% jump from a year ago, on $1.3 billion in revenue, a 14% increase. Backlog improved to $5.62 billion, a nearly 1% gain.
- The builder said with just 40% of Infrastructure Investment and Jobs Act funding slated to be spent by 2026, there are still years of opportunity ahead. “On the public side … we’re going to see a healthy market in ’27 and even beyond that, likely through 2030 and even beyond that,” said Kyle Larkin, Granite’s CEO, on a conference call with investment analysts Oct. 31. “We feel really good about the public market.”
Dive Insight:
Although that momentum helped fuel results for the company, which tallies about 75% of its business from public jobs, Granite also reported that a handful of its projects had been pushed into 2025 due to owner delays.
Kyle Larkin
Permission granted by Granite Construction
“These are all owner-driven,” Larkin said. “A couple were due to notice to proceeds being delayed a month or two. We have one with a change in condition, waiting for direction from the owner in terms of how to proceed. Another one was just slow in getting started down in Texas.”
Granite’s results and comments reflect a broader trend in the wider construction market, where publicly financed infrastructure projects have maintained momentum, even as privately backed builds have struggled amid a higher interest rate environment and political uncertainty during a presidential election year.
Larkin didn’t specifically say Granite’s delayed projects were on the private side, but he noted later in the call that the firm had less clarity about where that portion of the market is headed.
“In the private market, we do have a little bit less visibility and confidence in general,” Larkin said. “We have a lot more confidence in the public market. We’ll see how the private market plays out.”
At the same time, he said the flip side of the disparity is an opportunity to grow its share of private work, which now consists of water infrastructure services, drilling and infrastructure for mines, commercial site development for data centers, constructing intermodal facilities and infrastructure for solar facilities.
“We expect continued near-term growth in alignment with macroeconomic trends in technology, energy and the transportation of goods,” Larkin said.