An Outlook on Infrastructure

“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals,” Donald Trump said. “We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it.”  

There’s reason to be optimistic. The president-elect made a number of strong campaign promises to the American people, and one in particular caught our attention: his commitment to a sizable increase in our country’s infrastructure investment. Throughout his campaign, President-elect Donald Trump proposed spending up to $1 trillion during the next decade to make America’s infrastructure “second to none” and even repeated the promise earlier this month in his victory speech. Members of Congress have also shown a willingness to prioritize America’s infrastructure in ways that bring greater economic returns than the stimulus plan six years ago.

This commitment is shared by manufacturers across the country.  The NAM’s “Building to Win” blueprint for the new administration and Congress estimates that addressing our 10-year funding gap will cost more than $1 trillion. In addition, the new administration and Congress must improve regulatory and fiscal policies to incentivize increased levels of private investment in modernizing water and energy pipelines, railways and electricity systems.

According to the Manufacturers Alliance for Productivity and Innovation, 50 years ago, public and private infrastructure investment was almost 4 percent of GDP, and today infrastructure spending as a share of U.S. GDP is around 2.5 percent, much lower than the 3.9 percent in other countries, such as Canada, Australia and South Korea with Europe’s share closer to 5 percent. Overall, these figures put into perspective the reasons why the president-elect is focused on implementing a long-term plan for bolstering our infrastructure and how that kind of serious investment establishes our global competitiveness in the decades to come.

Around the world, America’s economic competitors, such as China, are already spending significantly more on infrastructure development annually than we are. Last year, China spent $1.4 trillion on infrastructure, such as roads, railways, bridges and its telecom networks. In fact, if we look over the past decade, China has spent about $11 trillion on infrastructure. That is more than 10 times the $1 trillion investment for which President-elect Trump is advocating.

A key reason manufacturing has grown despite murky economic conditions is discoveries of natural gas and the growth of privately funded pipeline infrastructure to transport it. The abundance of U.S. natural gas has lowered energy and production costs for manufacturing. And it’s our nation’s pipeline network that connects this domestic resource to people around the country. According to the NAM’s Energizing Manufacturing study conducted by IHS, “The combination of increased access to shale gas and the transmission [pipelines] that move that affordable energy to manufacturers across America meant 1.9 million jobs in 2015 alone.” Ensuring fair access to energy is a critical piece of America’s infrastructure challenge.

Our nation’s manufacturing sector is undeniably linked to the growth and modernization of our nation’s transportation and energy infrastructure. The private sector and manufacturers in particular stand ready to invest in U.S. infrastructure and help our new administration reach its hefty and worthy infrastructure goals.

Ross Eisenberg

Ross Eisenberg

Ross Eisenberg is vice president of energy and resources policy at the National Association of Manufacturers (NAM). Mr. Eisenberg oversees the NAM’s energy and environmental policy work and has expertise on issues ranging from energy production and use to air and water quality, climate change, energy efficiency and environmental regulation. He is a key voice for manufacturing on Capitol Hill, at federal agencies and across all forms of media.
Ross Eisenberg

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