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Smith's Research & Gradings
Volume: 
XXIX
Issue: 
11
Author: 
June 28, 2021

Smith's Research & Gradings

Big Bucks for Infrastructure

Big Bucks for Infrastructure

The $1.2 trillion Bipartisan Infrastructure Framework, which has garnered the support of the Biden Administration, calls for $109 bln. for roads, bridges and major projects; $73 bln for power infrastructure; $66 bln for passenger and freight rail; $65 bln for broadband access; $49 bln. for public transit; and $25 bln. for airports. The hope is that the bill will be passed before the fiscal year is over.

The outlook for construction shows a slow roll in 2021, with stronger growth in 2022.

FMI Corp.'s 2021 Engineering and Construction Industry Overview: Second Quarter Outlook projects that, total engineering and construction spending for the U.S. is forecast to end 2021 down 1% compared to up 5% in 2020.Declines in 2021 will be led by decreasing investment in private nonresidential building segments, including the lodging, office, commercial, and amusement and recreation segments. The impact will also extend into multifamily investment via mixed-use development along with reduced transportation, manufacturing, educational and religious spending.

Economists are projecting a slow and uneven recovery with continued turbulence in 2021 before what is expected to be a more positive outlook in 2022.

An article in Civil Engineering Magazine notes the 2021 Dodge Construction Outlook, which suggests that construction starts, which plunged 14% to $738 billion in 2020, will gain a little more than 4% to $771 billion in 2021, remaining well below pre-pandemic levels.

The article also cited the American Institute of Architects Consensus Construction Forecast, ancitipating a 6% decline in overall engineering and construction spending in 2021 before growth returns in 2022.

December's American Rescue Plan made $350 billion in support for state, local, territorial and tribal governments to recover from the effects of the COVID-19 pandemic. State and local issuers continue to face challenges — how to spend billions of federal stimulus dollars.

Take notice

Stay on top of the latest global news that can impact your investment strategy.

Yankee Stadium Bonds Baa1/NR/BBB+

Fitch Ratings assigned a 'BBB+' rating to the New York City Industrial Development Agency's (NYC IDA) $923 million PILOT Revenue Refunding Bonds,Series 2020, Yankee Stadium Project. Fitch has also affirmed the 'BBB+' rating on the Series 2006 and 2009 bonds, as well as the NYCIDA's Series 2006 and 2009 Rental Revenue Bonds, issued on behalf of Yankee Stadium LLC (StadCo). The Rating Outlook is Stable. The transaction will refund $863 million Series 2006 and 2009 bonds, generating more than $200 million in present value savings.

Outlook Positive

SpaceX blasts through a major milestone with first manned mission

This joint public/private venture between NASA and SpaceX begins a new chapter in space exploration. How will this effect future commercial demands in space?

Jobs Number May Indicate Covid Economy is Over

Wow! The U.S. economy added 467,000 jobs last month, keeping the unemployment rate in the 4.0% area. Also impressive is that there were large upward revisions from previous months. We say 'wow' because there was such negative sentiment prior to the release of the jobs number.

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