[VIDEO] Trump Expecting $200B in Spending to Build $1.5T in Infrastructure

Trump Administration infrastructure plan relying on local dollars to rebuild America's roads and bridges; plus more construction industry news on the February 22, 2018, edition of Construction News Tracker

Construction News Tracker is presented by Caterpillar and produced by ForConstructionPros.com.

Local dollars is what the Trump Administration's infrastructure plan calls for to rebuild America's roads and bridges. The 55-page document calls for $200 billion in federal dollars to spur a $1.5 trillion spending effort on roads, ports and airports with the majority of the funds coming from states and municipalities. The plan has two key components:

  • Funding for new investments by cuts from existing programs including $178 billion in cuts to transportation programs
  • Streamlining the permit process to get projects underway in two years or less

White House Publishes Infrastructure Plan Fact Sheet

Half of the $200 billion over 10 years would go towards grants for transportation, water projects, flood control and cleanup at hazardous materials sites. States and  local governments could use no more than 20% of the federal funds a far cry from the previous level of 50% on major construction projects. Fifty of the $200 billion would be earmarked for rural projects after some lawmakers complained that public private partnerships would not work for sustainable rural projects. And in a surprise move, the President called for increasing the federal gas tax by 25 cents per gallon to help pay for improvements.

January saw the Dodge Momentum Index slump from its December high of 151.5 down to 143.7, a reduction of 5.1%. The monthly measure of nonresidential building projects in planning, the commercial component was 7.8% lower while the Dodge institutional component was off 9/10ths of a percent. Analysts believe the January retreat returns the index to a more sustainable level.

ConstructConnect has unveiled its 2018 spring forecast that runs through 2019, and it's solid. The construction information and technology solutions provider sees a 5% average annual rise in construction starts. Chief Economist Alex Carrick says that recognizing states and municipalites are taking the lead with infrastructure. He is forecasting that road starts will increase 6.9% and bridge starts 9% this year. Carrick's forecasting is based on the metrics of a 3% GDP growth rate, increased spending from the recently envacted federal tax reform plan and global trade improvements. The ConstructConnect report also envisions nonresidentail building starts will drop 1.6% this year, but total nonresidential building starts will average 2% annually from 2019 through 2022.

The greatest obstacle facing our nation's home builders is the availability and cost of labor going into 2018. The NAHB/Wells Fargo Housing Market Index found that 82% of home builders found labor issues as a significant problem facing them in a recent survey. Compared with previous years, the issue is far from minor as it has grown in importance since 2011. Building materials price increases is another area of concern for 77% of home builders. Sixty-two percent of those surveyed said that the avialability and cost of developed lots for homes in the recovering market would be a problem in 2018 while lesser issues were impact and hook up fees and local and state environmental regulations.

A Tennessee advisory commission reports that state needs $45 billion of infrastructure through 2021. The figure is an increase of $2 billion from last year's estimate. Transportation and utility projects will require the most funding at $25 billion followed by school upgrades at $10 billion.

Winter weather conditions bring added challenges to many parts of the nation, including to state DOTs. In Wyoming, officials are looking into the potential of leasing or building housing units for first responders and highway workers. The challenge comes around the Jackson Hole area as additional housing is needed for state troopers, maintenance workers, snow plow operators and avalanche mitigators. All need to respond when called to incidents, and some live out of the area over Teton Pass in Idaho. Housing design plans call for upwards of two dozen units to house the employees, and the Wyoming DOT is trying to find funding to carry the plans forward.

Finally, in closing, he is truly wise who gains wisdom from another's mishap.

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