What will President Biden do for construction?
By Jenny LescohierJanuary 27, 2021
President Joe Biden took the oath of office on Jan. 20, turning the focus now on whether he will be able to pass his campaign proposals through Congress, a question that will have major implications for the U.S. economy and construction industry in the years ahead.
“Mr. Biden’s proposal to create a $2-trillion fund for infrastructure and clean energy as well as his proposals to expand broadband networks in rural areas, and plans to increase spending for housing, education and healthcare, if passed through Congress, would provide a boost to the construction industry in the coming years,” said Dariana Tani, economist at data and analytics company GlobalData.
“Passing these legislative proposals, nevertheless, will still be challenging for the new President given the Democrats’ slim majority in both the House and the Senate where most fiscally conservative members of Congress could be reluctant to agree to programs that increase the federal budget deficit.
“GlobalData expects the U.S. construction industry to grow by an annual average rate of 1.4% between 2021 and 2024, after increasing by an estimate of 1.5% in 2020. Record-low mortgage rates, and the significant shift in remote working, are expected to continue to support housing demand while the rollout of vaccines and prospects of an additional fiscal relief package present optimism to the short-term outlook.”
Tani added, “In the medium to long term, we expect that longstanding issues such as shortages of labor, expensive land and rising material costs will continue to hold back investment in the industry. Although a less disruptive foreign trade environment under the new Biden administration is likely to benefit the industry from lower tariffs, and somewhat limit the rise of construction material costs which have increased substantially under the Trump administration.
“Furthermore, Mr. Biden is likely to be more open to immigration as he has promised to reverse Mr. Trump’s controversial policies. This could help address the shortages of skilled labor, which are causing wage inflation and leading to additional increases in project costs and home prices,” Tani said.
Association of Equipment Manufacturers (AEM) President Dennis Slater congratulated President Joe Biden and Vice President Kamala Harris on their inauguration and pledged that equipment manufacturers will actively support the efforts of the new Administration to confront the nation’s many challenges, chief among them ending the pandemic and ensuring a safe and rapid economic recovery.
“On behalf of the equipment manufacturing industry, we congratulate President Joe Biden and Vice President Kamala Harris and express our sincere commitment in working with them to help unite our country after this historic election. President Biden has pledged to revitalize U.S. manufacturing by building back better, and we look forward to working with him to fulfil that promise.”
The National Utility Contractors Association (NUCA) also congratulates and supports the new Administration.
“On behalf of our members nationwide, we applaud the new Administration for its strong emphasis on business recovery and infrastructure projects,” said Doug Carlson, chief executive officer of NUCA. “The nation requires long-term economic solutions that must include billions of dollars in new resources to rebuild America’s infrastructure, and we applaud the new Administration for its recognition and support of that much-needed outcome.
“President Biden’s infrastructure plan has the promise to help American utility construction businesses and their employees recover and return to prosperity,” Carlson concluded.