NWPX: Positioned to Outperform as IIJA Funding Begins to Flow

The Infrastructure Investment and Jobs Act (IIJA), signed into law in 2021, has begun to deliver on its promise of revitalizing America’s infrastructure. As of June 30, 2025, $431.8 billion in budget authority has been enacted, with $296.8 billion obligated and $161.5 billion disbursed, signaling a robust pipeline of projects across transportation, water, and broadband sectors [1]. For companies like NWPX Infrastructure, Inc. (formerly Northwest Pipe Company), the IIJA represents a transformative tailwind, particularly in water infrastructure—a sector where the firm holds a dominant market position.

IIJA-Driven Water Infrastructure Tailwinds

NWPX is uniquely positioned to capitalize on the IIJA’s $55 billion allocation for water systems. The company’s Water Transmission Systems (WTS) segment, which produces steel pressure pipe and related infrastructure, serves as a critical supplier to public water agencies. According to its Q2 2025 earnings report, NWPX’s WTS backlog surged to $348 million by June 30, 2025, up from $289 million in Q1, driven by IIJA-funded projects [2]. This growth aligns with the broader $625 billion water infrastructure market projected over the next two decades, where transmission and distribution systems account for the largest share [3].

The IIJA’s emphasis on modernizing aging water infrastructure has created a surge in demand for NWPX’s products. For example, the Build America, Buy America (BABA) Act, a key component of the IIJA, mandates domestic sourcing for federally funded projects. With 55% domestic content requirements (rising to 75% by 2029), NWPX’s six Steel Pressure Pipe (SPP) plants are well-positioned to meet these rules, ensuring compliance and reducing supply chain risks [4]. CEO Scott Montross has emphasized the company’s strategic investments in domestic production, stating, “Our facilities are optimized to deliver high-quality, domestically sourced solutions that align with IIJA priorities” [5].

Margin Expansion and Backlog-Driven Growth

NWPX’s financial performance underscores its ability to convert IIJA-driven demand into profitability. In Q2 2025, the company reported net sales of $133.2 million, with the WTS segment contributing $84.6 million in revenue. The Precast Infrastructure and Engineered Systems segment also saw a 21.5% year-over-year sales increase, reflecting strong demand for precast concrete solutions in IIJA-funded transportation projects [6].

The firm’s backlog growth is a key catalyst for future earnings. As of June 30, 2025, NWPX’s WTS backlog stood at $348 million, with confirmed orders pushing it to $348 million—a 20% increase from Q1. This backlog provides visibility into future cash flows and allows the company to leverage economies of scale, driving margin expansion. CFO Aaron Wilkins noted that steel costs, which account for 29-30% of SPP costs of goods sold, have stabilized, further supporting profit margins [7].

Navigating Regulatory and Market Risks

While the Trump Administration’s 90-day pause on IIJA and IRA funding disbursements introduces short-term uncertainty, NWPX’s strategic positioning mitigates potential headwinds. The company has diversified its customer base, with a significant portion of its backlog tied to state and local projects less vulnerable to federal funding delays. Additionally, its recent order for the Mexico plant—shielded from U.S. tariffs—ensures continued utilization of capacity and revenue diversification [8].

Conclusion: A Compelling Long-Term Investment

NWPX’s combination of IIJA-driven demand, strong backlog growth, and margin resilience positions it as a standout in the infrastructure sector. With the IIJA’s funding cycle still in its early stages and the BABA Act reinforcing domestic production, the company is well-placed to outperform peers. As infrastructure spending accelerates, NWPX’s expertise in water transmission and precast systems will likely drive sustained growth, making it a compelling long-term investment.

Source:
[1] Infrastructure Investment and Jobs Act (IIJA) Funding Status, [https://www.transportation.gov/mission/budget/infrastructure-investment-and-jobs-act-iija-funding-status]
[2] NWPX Infrastructure, Inc. Announces Second Quarter 2025 Financial Results, [https://www.prnewswire.com/news-releases/nwpx-infrastructure-inc-announces-second-quarter-2025-financial-results-302524740.html]
[3] NWPX Infrastructure Q2 2025 slides: Precast growth drives ..., [https://www.investing.com/news/company-news/nwpx-infrastructure-q2-2025-slides-precast-growth-drives-earnings-beat-93CH-4194774]
[4] OMB Hit With Questions Surrounding Build America, Buy America Act, [https://www.constructionequipmentguide.com/omb-hit-with-questions-surrounding-build-america-buy-america-act/61869]
[5] Edward Jackson • Northland Securities, Inc., [https://fintool.com/app/research/analyst/edward-jackson]
[6] NWPX Infrastructure, Inc. Announces Second Quarter 2025 Financial Results, [https://www.prnewswire.com/news-releases/nwpx-infrastructure-inc-announces-second-quarter-2025-financial-results-302524740.html]
[7] Edward Jackson • Northland Securities, Inc., [https://fintool.com/app/research/analyst/edward-jackson]
[8] Edward Jackson • Northland Securities, Inc., [https://fintool.com/app/research/analyst/edward-jackson]