President Joe Biden has unveiled a revitalization plan consisting of an ambitious $2 trillion investment in America’s infrastructure, with a focus on stimulating the economy, job growth, and green development to modernize America’s old and crumbling roads, bridges, railways, and other groundwork. The plan should act as a catalyst to help modernize America’s network of physical and online connectivity, allowing the country to retain and build upon the economic power it has developed over the past century.

The high-level overview of the proposed plan calls for $1.3 trillion dollars to be spent on transportation, power, communities (housing, schools, childcare), water, and broadband internet, with remaining amounts slated for significant non-construction infrastructure spending, including research and development and technology, revitalization of small and medium businesses, and workforce development. The push for investment in traditional construction infrastructure will serve as a catalyst for growth in the construction sector, resulting in increased employment and nonresidential spending, both of which have fallen below pre-pandemic levels.

The core of this infrastructure plan lies in funding for improved transportation. Of the $1.3 billion designated for construction-related infrastructure, $621 billion is tied to transportation infrastructure, with allocations that include:

• $115 billion for roadways and bridges and an additional $174 billion for electric vehicle (EV) facilities
• $85 billion for public transit
• $80 billion for Amtrack/freight rail
• $25 billion for airports
• $17 billion for ports and waterways

The significant request for transportation infrastructure is not a surprise. The most utilized form of transportation in the United States is roadways; as the most recent and significant roadway bill (Fixing America’s Surface Transportation Act) expires in September expires, the Biden administration will need a new plan for roadway and bridge upgrades.

The $115 billion requested for roadways will be spent to modernize bridges, highways and other road-related infrastructure in most critical need of repair. According to a 2021 report from American Society of Civil Engineers, 43 percent of public roadways are in poor or mediocre condition, and 7.5 percent of bridges are structurally deficient. As car transportation remains the most popular form of transportation, is it critical the necessary capital improvements are made to fix American’s roads properly and efficiently. A study by INRIX Inc., a leader in mobility analytics, calculated that in 2018, congestion alone cost Americans $87 billion in lost productivity.

Biden’s revitalization plan also outlined a grant-and-incentive program to promote the construction of 500,000 electric-vehicle charging stations across the country by 2030. While the U.S. market for EV represents only about 2.5 percent of the total market (based on monthly new vehicle registrations in December 2020) it is expected to quadruple over the next five years; the need for infrastructure to support this growth will be a critical component in helping to reduce carbon emissions.

Finally, the administration’s plan includes modernizing many of the old and outdated rail lines and waterways, which are in desperate need of repair.

Beyond transportation infrastructure, the administration plans to invest in productivity-boosting projects in other infrastructure categories such as water, power, broadband, and housing. In total, the plan calls for $661 billion to be spent on these infrastructure sectors, with allocation as follows:

• $100 billion for power
• $111 billion for water
• $100 billion for broadband
• $350 for community development (schools/childcare/etc.)

The vulnerabilities of these infrastructure sectors have been underscored by high-profile events ranging from the Flint, Michigan, water crisis to the more recent disruption of the Texas power grid. Meanwhile, the pandemic has highlighted the need for all Americans to have access to reliable and affordable broadband internet service. Biden’s plan addresses these shortcomings, and includes investments tax credits to incentivize improvements.

Included in the Biden plan is a component centered on building stronger communities. The main goal is to build and retrofit more than 2 million homes and commercial buildings to address issues of housing affordability, particularly in marginalized communities that have been significantly affected by the COVID-19 pandemic. The focus on homes will allow many Americans to build equity in property, an important path to building wealth. The plan pairs investment in housing with American school systems. In total it calls for $100 billion to be spent on school systems, with funding to make schools safer, healthier, and better places for kids to grow and learn.While much of Biden’s plan is just that – a plan – and there are still hurdles which need to be overcome to achieve the necessary support to turn this into a bill, it is highly likely that some of these measures will be passed before the end of 2021 to the benefit of many contractors.

In order to prepare for the anticipated rebirth and redevelopment of America’s infrastructure, construction companies should be looking to invest in new technology both for on the job site and in the back office to take advantage of negative inflation-adjusted interest rates to pay for these long-term investments. Contractors should also be continually evaluating labor and material sourcing needs. One of the most significant industry trends during the post-Great Recession construction boom was shortages of skilled labor. While employment remains below pre-pandemic levels, it would be good for contractors to evaluate personnel across the board and ensure they have the right labor force in place for passage of this plan. With the increase in material prices, contractors also need to evaluate alternative material sources or look to hedge or buy out their jobs to lock in pricing.