Infrastructure development, aided by emerging technologies, could boost the closely related construction and manufacturing industries.
Can we dig our way out of the economic wreckage caused by the pandemic? For many in the construction and manufacturing industries, the answer is a resounding “Yes!” What they are less certain about is when this will happen.
Today, major needs exist across the United States for construction projects of all types. Infrastructure comprises a whole category of its own, including roads, highways, bridges, tunnels, dams, reservoirs, utility projects, oil and gas pipelines, and wind and solar farms, to name a few. Facilities make up another broad category that includes everything from hospitals and medical centers to elder care and assisted living facilities, manufacturing plants, warehouses, office and retail buildings, and entertainment venues. Needs for new residential construction aren’t likely to go away anytime soon, either.
The problem is that the COVID-19 pandemic, with few exceptions, pretty much brought the construction industry to a halt across the globe. According to an August post by Joe Bousquin of Constructiondive.com, “infrastructure projects totaling more than $9.6 billion have been delayed or canceled in the midst of the COVID-19 pandemic, according to a report released by the American Road & Transportation Builders Association (ARTBA).”
The pandemic has had a chilling effect on contractors, who are reluctant to buy new equipment until they are more confident about the health of the economy going forward. That, of course, is tied to the course of the pandemic, and how long it will take to defeat it. In the meantime, equipment manufacturers have largely pulled the reins in on sourcing parts for new excavators, bulldozers, and cranes.
“Our biggest worry is, what’s next?” said Dennis Slater, president of the Association of Equipment Manufacturers (AEM), in a phone interview. “People need to have certainty. Contractors aren’t involved in buying new equipment for projects if they don’t know what projects are going to be next.”
When the construction industry receives the go-ahead, it will be primed to do its job better than it ever has before. This is no longer your granddad’s industry: Emerging technologies like AI-guided autonomous excavators, electrically powered machinery, and data analytics are poised to bring greater efficiency, safety, productivity, and predictability to job sites.
Today, equipment manufacturers support 12 percent of all U.S. manufacturing jobs, and 2.8 million jobs overall, according to AEM. It’s easy to see how multi-year investments in infrastructure projects would drive growth in the construction industry, as well as for the manufacturing suppliers that support it. But there’s another rub: Federal infrastructure investments have tended in recent years to be incremental, rather than long-term commitments. And as states and municipalities have faced mounting budget pressures during the pandemic, many have had to curtail funding for infrastructure projects.
A recent Harris Poll survey conducted on behalf of the U.S. Conference of Mayors and Siemens U.S.A. found that “nearly all mayors surveyed (98 percent) expect their city’s operating budget to decline over the next 12-18 months, with two in three (66 percent) attributing all or most of the decline to the COVID-19 pandemic,” according to a release from the organizations.
A majority of the U.S. mayors surveyed said that investing in infrastructure to generate jobs and economic growth is the top immediate and long-term priority for mayors, according to the report, “Infrastructure, Technology and Mayors’ Priorities for Confronting a Health, Economic and Societal Crisis.”
The release said that the study highlights “mayors’ collective perspective on the strengths and limits of America’s infrastructure in supporting continuity amid crisis, emergency response, economic recovery, ongoing sustainability goals and the safe reopening of schools, offices, businesses and other vital institutions.”
“This survey shows that mayors are more committed than ever to embracing the sparks of innovation and technology with greater urgency to adapt, redefine, and reimagine their cities in order to better serve local residents and advance economic recovery,” said Barbara Humpton, CEO of Siemens USA, in the release. “Siemens is proud to work with mayors across this country to combat the challenges of COVID-19 and help build more resilient, prosperous communities. The global pandemic has only reinforced our belief that partnership between residents and their cities, partnership between mayors and cities, and partnerships between businesses and the communities are essential to moving our country forward.”