In November 2021, President Joe Biden signed into effect the Infrastructure Investment and Jobs Act. The Act was designed to modernize and improve U.S. infrastructure including roads, bridges, transit, rails, ports, airports, broadband, and drinking and wastewater infrastructure. The Act provides an additional $550 billion in new spending on infrastructure and is also expected to add a significant number of jobs.
As of May 2022, the six-month anniversary of the plan’s enactment, the bill has already provided $110 billion to the states, with more funding available for future opportunities as well. It is estimated that the $110 billion has been dispersed over 4,300 projects, benefiting over 3,000 communities.
While applications have opened for both the major local infrastructure and special projects grant funding of $2.9 and $1 billion respectively, the $110 billion already in circulation has begun to make a difference. The U.S. Department of Transportation and Federal Highway Administration have announced that $27 billion has been allocated to replace and repair bridges throughout the country, as well as another $52.5 billion set for Federal Highway Apportionment in 2022 alone. It was also announced that $1.2 billion would be set aside for highways in rural Appalachia. The funding will also go to address increasing U.S. traffic deaths and creating what has been referred to as “safe streets”.
There is concern circling about the impact high inflation and labor shortages will have on the Act moving forward. The projects will be more expensive and might see delays as a result. Over the last two years, the construction industry has seen a 15 – 20% increase in costs each year. This is likely the impact of ongoing supply chain shortages and increasing employee wages.
In projecting forward, we expect to see both new and old federal programs increasing funding and sending that funding out.
