Road builders will be the biggest winners of any infrastructure spending bill passed this year by Congress, with contractors who work in the environmental public works space sharing in the spoils, too, according to a leading construction economist.
Richard Branch, chief economist at Hamilton, New Jersey-based Dodge Data & Analytics, broke down three competing scenarios for infrastructure spending starting at the end of 2021. He looked at President Joe Biden’s $2.3 trillion American Jobs Plan, the Republican’s alternative $568 billion proposal and Dodge’s own baseline plan, developed on the assumption that some form of an infrastructure bill will be passed this year.
“Regardless of which plan we go with here, the Republican plan, our baseline forecast or the American Jobs Plan, there’s a huge step [up] here for road builders and bridge construction over the coming five years,” Branch said on a webinar this week. He added that the environmental public works sector, which includes water infrastructure, sewers, dams and reclamation projects, would also see “a huge improvement over current funding assumptions” under any of the three scenarios.
Looking specifically at roads and bridges, Branch broke down the funding levels for each possible plan. In the American Jobs Plan, he broke out $135 billion in spending. That compares to $299 billion for roads and bridges in the Republican plan, and $100 billion in Dodge’s baseline plan.
Each of Branch’s models also assumes that an additional $300 billion will be approved to renew the Fixing America’s Surface Transportation Act, which expires in September. While he acknowledged there have been discussions in Washington around replacing FAST Act funding with a larger infrastructure plan, he said if it’s kept in, the Republican plan would supercharge spending for road and bridge building to the tune of nearly $600 billion.
“The Republican plan here for roads and bridges would be far to the left of where the American Jobs Plan is coming in,” Branch said. “This would be a huge amount of money for road builders and bridge construction over the course of our forecast through 2025.”
Environmental public works projects would get a smaller, but also significant, boost as well.
“In the American jobs plan, there was about $128 billion for spending that falls into the environmental public works category,” Branch said. “Our forecast is about $70 billion. And then the Republican plan, as we read it, is about $50 billion.”
Branch said he started developing Dodge’s baseline plan immediately after Biden unveiled the American Jobs Plan at the end of March, under the premise that in an evenly divided Senate, it wouldn’t pass as is. When the alternative Republican plan was announced last week, upon first analysis, it appeared similar to the Dodge baseline forecast.
That, and the fact that Biden seems open to compromising with Republicans, bodes well for some sort of infrastructure plan being approved in 2021, a stark contrast to former President Donald Trump, who touted the importance of infrastructure funding but failed to advance legislation through Congress.
Now, Branch said, things look different.
“I put the odds of the [American Jobs Plan] passing as is and becoming law at somewhere around 30% to 40%,” Branch said. “Conversely, I think the chance of nothing happening is also extremely low… We do believe something will happen in terms of an infrastructure program sooner rather than later.”
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