State and local governments play a central role in shaping the nation’s physical and economic landscape through investments in public infrastructure. From roads and bridges to water systems and public buildings, these long-term capital expenditures support not only daily life but also regional economic competitiveness and resilience. In recent years, a confluence of factors, including aging infrastructure, climate pressures, and renewed federal funding, has prompted governments across the country to reassess and, in many cases, increase their infrastructure commitments.
This investment growth has wide-reaching implications. From local economies and employment to material supply chains, public infrastructure projects require careful orchestration and vast amounts of building materials. Surges in demand for concrete, asphalt, lumber, aggregates, and steel can strain regional supply networks, especially in areas experiencing rapid or concentrated development. These shifts not only affect procurement timelines and pricing but can also shape where related industries expand or contract.
To gain insight into these recent infrastructure trends, researchers at Twisted Nail, a Texas-based construction aggregate supplier, analyzed the latest data from the U.S. Census Bureau. The report examines how state and local public infrastructure expenditures have changed over time and which sectors and states are seeing the most investment.
Here are some of the key takeaways from the report:
- Public infrastructure spending has reached a generational high: Total state and local government expenditures on infrastructure have climbed to their highest level in over 20 years, driven by a combination of federal stimulus, long-term capital needs, and strategic investments in resilience and modernization.
- Roadways and schools dominate infrastructure budgets: Spending on highways and streets totaled $141 billion, while educational infrastructure reached $110 billion. Combined, these two categories accounted for over half of total state and local infrastructure spending.
- Power and water infrastructure saw the fastest growth: Inflation-adjusted public spending on power infrastructure increased by 106% over the last five years, while water supply infrastructure grew by 61%.
- The Dakotas lead infrastructure spending per capita: South Dakota and North Dakota ranked first and second, respectively, each spending more than $3,700 per resident on public infrastructure.
How Has State and Local Public Infrastructure Spending Changed Over Time?
At $463 billion, public infrastructure spending has reached its highest level in over two decades
Source: Twisted Nail analysis of U.S. Census Bureau data | Image Credit: Twisted Nail
Public infrastructure investment in the U.S. has reached a level not seen in more than 20 years. In 2024, total state and local government spending on infrastructure reached $463 billion, according to Census Bureau estimates. This figure includes not only funds raised by states and municipalities themselves, but also federal dollars distributed to them through grants, programs, and reimbursements. Altogether, public infrastructure spending rose by 45.5% over the last five years, and by 18.6% after adjusting for inflation.
This resurgence marks a sharp reversal from a long period of underinvestment that followed the Great Recession. In the decade after the 2008 financial crisis, infrastructure consumed a shrinking share of total public spending as many state and local governments faced budget shortfalls and deferred capital projects. The recent increase reflects a mix of strategic reinvestment and federal fiscal support, most notably through the Infrastructure Investment and Jobs Act (IIJA), which authorized $550 billion of new funding to be disbursed over multiple years for roads, utilities, broadband, and more.
However, construction costs have been climbing steadily in recent years, driven by a combination of inflation, supply constraints, and trade policies. Prices for construction aggregates, materials like sand, gravel, and crushed stone essential for most infrastructure projects, have risen sharply. At the same time, tariffs on imported goods are pushing up costs across the sector, affecting everything from construction machinery and equipment to building materials. These rising material costs may complicate project planning, strain public budgets, and influence where capital investments are most feasible going forward.
What Infrastructure Projects Are Receiving the Most Funding?
Roadways and schools account for over 54% of public infrastructure spending, but power and water supply investments have grown the most
Source: Twisted Nail analysis of U.S. Census Bureau data | Image Credit: Twisted Nail
Most state and local infrastructure budgets remain concentrated in just two sectors: transportation and education. In 2024, governments spent $141 billion on highways and streets, the single largest category, and another $110 billion on educational facilities. Combined, these two categories accounted for more than half of all state and local public infrastructure spending. While these priorities speak to the enduring needs of mobility and educating future generations, they also reflect the growing costs of large-scale infrastructure projects.
In terms of investment growth, the fastest-growing areas over the past five years are in power and water supply infrastructure. Inflation-adjusted spending on power infrastructure, covering everything from electrical grids to energy storage and renewable generation, more than doubled (+105.6%) between 2019 and 2024. Water supply systems, including treatment facilities and distribution networks, saw a 60.8% increase in real spending during the same period. These shifts likely reflect mounting climate adaptation needs, regulatory mandates for resilience and sustainability, and pressure to modernize aging utility systems.
Public Infrastructure Spending by State
The Dakotas spend the most on public infrastructure per capita by far
Source: Twisted Nail analysis of U.S. Census Bureau data | Image Credit: Twisted Nail
Total infrastructure spending varies significantly by state, largely tracking with population size and economic scale. Texas ($60.7 billion), California ($54.7 billion), and New York ($27.9 billion) lead in absolute spending, reflecting the demands of dense urban systems, extensive transportation networks, and large public sector footprints. These three states account for over 30% of the nation’s infrastructure investment, but their spending per resident is more in line with the national average.
By contrast, the Dakotas stand out for their exceptionally high per capita infrastructure spending. In 2024, South Dakota invested $5,004 per resident, nearly four times the U.S. average, while North Dakota spent $3,785. These outliers reflect both policy choices and specific funding flows. South Dakota has been deploying $1.9 billion in federal highway funds and $225 million for bridge repairs under the IIJA over a five-year period starting in 2021. North Dakota has also received large investments from federal programs to support infrastructure upgrades in recent years, and is expected to procure another $1.2 billion for surface transportation improvements in the 2026 through 2028 fiscal years.
Looking forward, while public infrastructure spending has reached a generational high, the outlook remains uncertain. Much of the recent growth has been driven by expiring federal programs, particularly the Infrastructure Investment and Jobs Act, which is set to expire in 2026. Its funds are scheduled to be fully allocated, obligated, and outlaid in the following years. Without continued federal appropriations or increased state-level commitments, infrastructure budgets could level off or even decline, especially in states with limited revenue capacity or mounting fiscal pressures.
Adding to this uncertainty are several structural headwinds. Material costs remain volatile amid recent trade policy shifts, with tariffs on steel and aluminum imports increasing sharply—a trend that is raising input costs across infrastructure projects. Labor constraints are also a major factor, with the Associated Builders and Contractors (ABC) projecting the construction industry needs to hire nearly 500,000 workers to meet labor demand due to a skilled workforce shortage. These dynamics may lead to infrastructure project delays, budget overruns, or reduced project scopes, complicating the pipeline for infrastructure investment and material demand in the years ahead.
At the same time, there remains a long-term need for infrastructure investment. Climate resilience, energy transitions, and aging transportation networks are placing new pressures on state and local governments. In fast-growing regions, expanding capacity remains a top concern, while in older urban centers, replacement and modernization dominate the agenda. Material suppliers, including those in the construction aggregate industry, will likely face shifting demand patterns as states recalibrate their capital priorities and federal funding fades from its pandemic-era peak.
For now, the historic surge in spending is reshaping local economies, supply chains, and infrastructure markets. But whether that momentum continues will depend on how states adapt to changing fiscal conditions, political leadership, and infrastructure needs beyond the current federal funding cycle.
For a complete breakdown of state and local public infrastructure spending across all 50 states and Washington, D.C., see Which States Are Investing the Most in Public Infrastructure? on Twisted Nail.
Methodology
Photo Credit: Bilanol / Shutterstock
To determine the states investing the most in public infrastructure, researchers at Twisted Nail analyzed the latest data from the U.S. Census Bureau’s 2024 Value of Construction Put in Place Survey, 2024 American Community Survey (ACS) 1-Year Estimates, and 2023 Annual Survey of State and Local Government Finances (ALFIN). The researchers ranked all 50 states and Washington D.C. by state and local public infrastructure spending per capita. For the purpose of this analysis, public infrastructure was considered to be all non-private construction spending commissioned by state and local governments. This includes public infrastructure sectors like roadways, education, sewage, power, and water supply, among others. Additionally, while public infrastructure projects may be commissioned by state and local governments, their funding sources may include federal funding.
Researchers also calculated the total public infrastructure spending, the infrastructure spending share of total public spending, the 5-year change in public infrastructure spending, the 5-year change in public infrastructure spending adjusted for inflation, and the 5-year change in population. The infrastructure spending share of total public spending was calculated using 2023 data, the latest year available for ALFIN data, and 5-year change calculations compared data covering 2019 and 2024.
For complete results, see Which States Are Investing the Most in Public Infrastructure? on Twisted Nail.
