How Biden’s Infrastructure Plan Could Impact the Construction Industry for Years to Come
Many economists and industry leaders believe that even a moderate infrastructure investment would significantly help the construction industry in the wake of the COVID-19 pandemic. While some sectors of the industry will likely see more growth than others, the American Jobs Plan proposed by President Biden would spend $1.2 trillion on infrastructure over the next 8 years, funding roads, railways, bridges, airports, electric vehicle charging stations, broadband, and other physical infrastructure across the country.
Highways and Bridges Top the List
According to Steve Jones, Senior Director of Industry Insights Research at Dodge Data & Analytics, a vast majority of this money will likely target highway and bridge projects. Jones mentions that there are many unknowns regarding the plan but goes on to state that “even a limited infrastructure plan would have a huge and meaningful impact.” While the immediate impact of this plan would likely be limited due to the time it takes to plan projects, investment firm Evercore ISI economist Peter Williams says it will likely begin boosting economic growth in 2023. Williams also estimates that it could create up to 775,000 jobs by 2025 and 2026.
Where the Money Would Come From
This plan has also been drawing attention from industry leaders in that, “it would be paid for with unused COVID-19 relief money, user fees, and increased tax compliance and other measures,” according to ForConstructionPros.com. Limiting tax increases on corporations would further help the growth of the construction industry and make it easier for Congress to pass legislation.
Although the progress made so far seems very promising to industry leaders, there’s a long road ahead to get final approval within Congress. One big advancement in getting this plan passed, however, was that just a few weeks ago, Biden and a bipartisan group of senators – five Democrats, five Republicans – announced that they had reached a compromise that calls for $559 billion in new spending over five years – including $110 billion invested in roads, bridges, and other major projects. After a two-week July 4 recess, the Senate reconvened on July 19th with a goal of making further advancements on the bipartisan plan and budget resolution.
The End of the FAST Act
Democrats have been increasingly eager to pass the bill because of the expiration of the Fixing America’s Surface Transportation Act (“FAST Act”) coming on September 30th. The FAST Act, signed in 2015, provided long-term funding for surface transportation, infrastructure planning, and investment. The new bipartisan deal could move to the Senate floor as soon as the second week of the session, where Senate leaders aim to achieve their respective parties’ goals. As the Senate continues to make changes and compromises on the plan, each step has continued to make industry leaders increasingly optimistic for the growth of the construction industry in the coming years.
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