As the Nation Awaits Repairs to Infrastructure, Industrial Specialists Are Adapting
At the time of this writing, the U.S. stands to lose its global competitive edge if Congress fails to take action on a pair of substantial infrastructure bills, but astute industrial specialists are still finding opportunities in an evolving market.
Back in the 1970s, Fram Oil Filters began a long-running television ad campaign featuring an auto mechanic imploring customers to get regular oil changes—which included their oil filter—to prevent catastrophic engine failure. The tagline was essentially this, “You can pay me a little now, or you can pay me a lot later.” The slogan often surfaces when business cases for preventive maintenance are made for everything from property management to healthcare, but it may be time to revive it once again as the country tries to move forward on two massive and long-overdue infrastructure bills.
A pair of reports issued earlier this year by the American Society of Civil Engineers (ASCE) analyzed the current state and potential future of America’s infrastructure, and the results aren’t pretty. The first report, Failure to Act: Economic Impacts of Status Quo Investment Across Infrastructure Systems, forecasts that the U.S. economy will lose more than $10.3 trillion in U.S. Gross Domestic Product (GDP) by 2039 if investment levels remain the same. Losses would include $2.4 trillion in exports, $1.8 trillion in imports into the U.S. economy (resulting in a $4 trillion loss of trade), and a loss of more than three million jobs. On a consumer level, inaction would drain more than $3,300 from a family’s annual disposable income each year from 2020 to 2039.
“First of all, there had better be a bill (passed),” said Maria Lehman, incoming president of the ASCE for the 2022-2023 term. “The needs for rebuilding our infrastructure are $5.9 trillion, and we’re spending just shy of $3.3 trillion, so not doing something is not the answer because it just keeps getting worse and worse.”
A second study, the quadrennial Report Card for America's Infrastructure released earlier this year, paints an equally troubling picture, even though the grade for the overall infrastructure actually improved from a D+ in 2017, to C-. America’s roads received a D grade, with 43% considered in poor or mediocre condition, costing motorists over $1,000 each year in wasted time and fuel. Bridges fared better with a C grade, but 42% of all bridges are at least 50 years old, with a repair price tag of $125 billion. On a brighter note, rail (B) and the ports (B-), two vital links in the supply chain, received respectable grades, in part because freight rail is almost entirely privately funded, and many ports are privately owned and operated (with others managed by a government or a quasi-government authority.) The report also emphasizes that although there are 17 categories being assessed individually, infrastructure as a whole is now more connected than ever before.
Read the full article in the Fall 2021 issue of SIOR Report now!