Because the construction industry employs such a large percentage of the U.S. population, and because infrastructure is a common topic of political discussion, the construction industry can be extra sensitive to the election cycle. With a new president on the horizon, businesses across the country will move to project how changing policies will affect their bottom line. Now that Donald Trump has been elected to serve as the next president of the United States, let’s take look at how certain sectors of the construction industry might fare.
Infrastructure, P3 Projects
The Trump Administration is seeking to invest $550B to improve infrastructure. This is a $450B reduction from the $1T plan announced on Trump’s campaign trail, and it is still unclear whether the time frame from his original 10 year plan has been reduced. Considering both Donald Trump and Hillary Clinton proposed serious infrastructure improvements, it appears that progress in this area may come with less resistance than in other areas. However, by electing Donald Trump, the country is now committed to a plan that is twice as ambitious as Clinton’s even after reeling in estimates post-election.
Trump has claimed private investment would be a major part of his infrastructure plans, meaning P3 (public private partnerships) projects could receive a serious boost. He will likely look to P3 projects to lessen the burden of public funding on improvements. In this regard, Trump may be in line with President Obama who has come out in favor of P3 projects in the past. Many states are also a fan of P3 projects, as we have seen a recent surge in P3 legislation, particularly for infrastructure projects. In order to induce investment in infrastructure projects, President Trump says he will provide tax credits to those partners on P3 projects, along with equity in the projects that produce revenue. At least when it comes to supporting P3 projects, electing Donald Trump may not have spurred a yuge change.
To put it in Trump’s own words: “Our roads, bridges, airports, transit systems and ports will be the envy of the world and enhance the lives of all Americans. We will build the roads, highways, bridges, tunnels, airports, and railways of tomorrow.”
While much of the construction industry will stand to benefit from deregulation, green construction may take a hit. Trump is certainly no fan of the green movement, and has condemned green building in the past, but the construction industry as a whole may benefit from Trump’s presidency. While there will almost assuredly be less environmental regulation that favors green construction, those who seek out green building projects on their own might find benefits from the deregulation of the construction and real estate industries. However, in the short term, it appears that solar and wind energy might take a serious hit with the new administration. For now, it’s too early to tell how electing Donald Trump will affect green construction projects in the long run.
For a more on green construction under President Elect Donald Trump, Greentech Media and Green Building Law Update have both taken a deeper look at the subject.
Oil and Gas
By electing Donald Trump, the country has agreed to some level of deregulation with oil and gas, along with an emphasis on expanding U.S. production. As industry members react, construction work in the oil and gas sector should really pick up. It seems pretty clear that those construction industry members supporting the oil and gas industry will benefit from a Trump presidency.
For more on the oil and gas prospects under Donald Trump, OilPrice.com recently published this article titled Oil and Gas- Huge Victors of the Presidential Election.
Trump’s name has been tied to nearly every topic in the construction industry, from green construction to the EB-5 program, so his stay in the White House will undoubtedly have a major impact on the construction industry. With the Miller Act in place, at least subcontractors and suppliers on federal projects will be protected from Trump’s previous nonpayment issues (the president elect has faced over 200 mechanics liens). Whether the impact is positive or negative remains to be be seen, but in the short term, the construction industry should be excited about its prospects with Trump in the Oval Office.
Curious about the intersection of all these ideas? We’ve got you covered with this post on green building, alternative energy, and P3 projects! For more on how changing laws affect mechanics lien law and the construction industry, check out our New Legislation posts.