Who Benefits from the Rebuilding of America’s Infrastructure?
While many suspect or know on some level that America’s infrastructure is in trouble, few of us are truly aware of the depth of the problem. Roads in this country are crumbling, airports and seaports are outdated, and nearly 70,000 bridges have been deemed structurally deficient.
As individuals and business owners, we may think that these infrastructure problems are a mere inconvenience that will likely sort themselves out with time. According to the American Society of Civil Engineers, this is flawed thinking. In fact, deteriorating infrastructure affects businesses, employment levels, and is currently to blame for an average household disposable income loss of $3,400 each year.
As we reach critical mass with these infrastructure issues, many policymakers are starting to get the message that something needs to be done – on a large scale. Current estimates call for $2.75 trillion to be invested in infrastructure by 2020.
While we haven’t seen funding on this level yet, Congress passed the FAST Act in December 2015 which is a $305 billion transportation-infrastructure bill. Of these funds, $225 billion are committed to improving highways over the next five years. As Federal and State funding for infrastructure projects gain more support, several entities are positioned to benefit from these ongoing investments.
Infrastructure Design and Planning
With so many projects in need of attention, there’s little doubt that advanced means of planning and coordination are needed for the infrastructure projects of the future. Many projects today are using what is called Building Information Modeling (BIM), which is a technology that improves both project predictability and efficiencies. Beyond this, those who use BIM are seeing better ROI results with projects.
Before any asphalt is laid or steel girders put in place, experts will need to be enlisted to design and plan key infrastructure projects throughout the country. Here are just a few of those firms who will likely play these roles in the coming years.
- AECOM Technology Corp. (NYSE: ACM) is an architecture and engineering design services firm that played a large role in the rebuilding of the World Trade Center NYC. The company has worked on key infrastructure projects in the energy, transportation, and environmental sectors.
- URS Corp. (NYSE: URS) is a California-based engineering, technical services, and construction firm that offers infrastructure planning, design, program management and construction services to both the federal government and private industrial clients.
Infrastructure Materials and Construction
There are also several materials-related and construction companies that are poised to benefit from the rebuilding of America. Here are just a few:
- Granite Construction Inc. (NYSE: GVA) is a U.S.-based construction company that specializes in civil projects including the construction and improvement of highways, bridges, utilities, water-related facilities, and other infrastructure projects. Granite has reported that is working with its largest project backlog in the company’s history. It also expects further business to roll in as additional Federal funds are allocated for infrastructure improvements.
- Vulcan Materials Company (NYSE: VMC) is an Alabama-based producer of the construction aggregate materials that are needed for these large infrastructure projects. Vulcan produces both ready-made asphalt and is the largest producer of the stone aggregates that are used in concrete. The company had revenue of $3.4 billion in 2015 and is forecasting growth of 10% to 14% for at least the next several years.
Investment in infrastructure in the U.S. is a given. It is an absolute necessity to avoid much of this country’s framework from simply collapsing. In the long run, infrastructure investment is simply a must-have for America, yet it’s also been shown that short-term benefits will include the addition of over a million new jobs and a boost in the country’s net GDP. While the timeframe on some of these projects is still unknown, there is no doubt that they will be undertaken, and the companies involved will reap the benefits.