As we near the end of Donald Trump’s first month of presidency, his potential impact on the current nationwide construction boom is beginning to take shape. The construction industry generated $650 billion in 2016, the highest amount since 2008, according to the U.S. Bureau of Economic Analysis. The new administration has plans to spur significant growth in an often overlooked area, infrastructure.
In his Contract with the American Voter, released prior to his election, Trump outlined that he would “leverage public-private partnerships, and private investments through tax incentives, to spur $1 trillion in infrastructure investment over 10 years.” Weeks later, in his acceptance speech, then president-elect Trump again vowed to rebuild America’s infrastructure, including not only roads, bridges and tunnels, but also schools and hospitals. And in the days following his election, the financial market responded to these promises as U.S. construction companies’ stocks skyrocketed.
On top of Trump’s expressed desire to revitalize U.S. infrastructure, a 2016 report from the American Society of Civil Engineers found that the U.S. will face a funding shortfall of more than $1.4 trillion by 2025 for roads and bridges, drinking and wastewater facilities, electrical infrastructure, aviation, and water ports.
Clearly, the president — and researchers — feels that there is an urgency to address infrastructure issues. Should a Trump infrastructure program pass through Congress, major projects could get off the ground quickly, which could have significant insurance and risk management ramifications. After the 2008 recession, countless skilled workers and frontline leaders left the construction industry. As a result, many construction companies are struggling to find highly qualified, safe, and productive employees.
The potential increase in spending on infrastructure projects will require companies to attract and train new employees. Training these new employees to operate safely and with a high level of productivity and quality is critical to ensuring that companies avoid the cost and complication of injuries and burdensome construction defect claims.
Passing a comprehensive infrastructure plan is certainly something that will take time, but it is an important item on Trump’s agenda. And it’s not only on his to-do list. The National Governors Association recently identified infrastructure as a key area where bipartisanship is needed in 2017. And while the desire to improve infrastructure has at times received bipartisan support, Republicans and Democrats typically differ in their views on how to pay for it. Thus, progress has been stagnant and investments have been low due to lack of consensus.
According to the Congressional Budget Office, total public spending on transportation and water infrastructure has been on the decline for nearly 60 years — with the exception of 2009, when the American Recovery and Reinvestment Act was passed following the 2008 financial crisis. President Obama’s more recent proposals were blocked, with critics saying the plans would result in increased government spending and higher taxes for many Americans. Unlike in previous years, with potential support from both sides of the aisle, President TrumpDonald TrumpBaldwin calls Trump criticism following 'Rust' shooting 'surreal' Haley hits the stump in South Carolina Mary Trump files to dismiss Trump's lawsuit over NYT tax story MORE could pass a large infrastructure plan. In fact, last month, House Minority Leader Nancy Pelosi said that Democrats are interested in working with Trump “to pass a bill very fast.”
While Trump’s proposed plan would require some federal spending, it would rely heavily on private funding. The administration’s initial outline of the plan would incentivize investment in infrastructure projects by offering a tax credit to private investors. While the tax credits would cost the government money, taxes collected from the workers and companies participating in these infrastructure projects would offset the costs, according to the outline.
Revitalized roads, railways, bridges will allow for the safe transport of both people and goods in the modern era. After a divisive election, this could represent important common ground. Infrastructure is an issue that both Republicans and Democrats can work on together in order to benefit all Americans.
James P. Marquet is vice president and co-leader of the construction industry team at The Graham Company, a Philadelphia-based insurance and employee benefits broker focused on industries including construction, manufacturing, and distribution.
The views expressed by contributors are their own and are not the views of The Hill.