On Friday, President Obama signed into law a spending package including appropriations for Fiscal Year 2012. The package reduces the highway obligation limit to $39bn from last year?s level of $41.1bn. While this represents a reduction of 5% yoy, it is a significantly better outturn than the Republican Party?s original plans for a cut to $27bn. Details of how to fund such a level of spending are yet to be outlined.
Reduced funding for infrastructure is never an ideal situation, however the $39bn funding level as opposed to the Republicans original target, highlights the political sensitivities that come with attempting to reduce funding for labour intensive infrastructure programmes in the current economic climate. With regard to CRH, US infrastructure represents c.25% of Group EBITDA.