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.