Why the Time to Build is Now
The urgent need for better, modernized infrastructure is evident everywhere, from highways to hospitals, airways to railways, green energy to internet connectivity. The benefits of such improvements are wide-ranging: they will improve the quality of our lives, make our people healthier and protect our environment. The economic impact is just as far-reaching. More than 17 million U.S. workers, approximately 12% of the total workforce, are employed in infrastructure jobs according to the Brookings Institution. As a result, infrastructure investment will spur the creation of well-paying jobs everywhere, including along the industrial metals supply chain.
The state of infrastructure
Infrastructure decline can be found coast to coast. That’s why the American Society of Civil Engineers (ASCE) has given U.S. Infrastructure a grade of D+ for being “mostly below standard” and at “strong risk of failure.” If you look closely at the 2017 ASCE’s Infrastructure Report Card, areas in need of improvement are everywhere, with roads, hazardous waste, inland waterways, levees, dams, aviation, drinking water, wastewater and schools all receiving grades of D+ or lower.
According to the ASCE, the United States needs to invest $4.59 trillion in its infrastructure by the year 2025 merely to bring its infrastructure up to an adequate B- level. That is “about $2 trillion higher than current funding levels” according to Reuters.
While the ASCE report refers specifically to the United States, Canada’s infrastructure is also in need of repair. According to the 2019 Canadian Infrastructure Report Card (CIRC), 40% of Canadian roads and bridges are in fair, poor or very poor condition. Nearly a third of Canada’s linear assets (such as watermains and sewers) and their public transit systems have the same inadequate rating. As stated in the CIRC report’s Executive Summary, “the state of our infrastructure is at risk, which should be cause for concern for all Canadians.”
The benefits of investment
Every $1 spent on infrastructure investments adds $3 to GDP growth, according to a University of Maryland study. An infrastructure investment increase of just 1% of Gross Domestic Product (GDP) would result in an estimated $320 billion of economic output in the first year alone, and add 1.5 million jobs to the economy. Compare that to the cost of inaction—Business Roundtable estimates that “failing to close funding gaps across America’s infrastructure systems could lead to 2.5 million lost jobs in 2025 and 5.8 million lost jobs in 2040.”
The opportunities for job growth are impressive:
- The renewable energy industry is creating new jobs 12 times faster than any other segment of the economy, according to a study from the Environmental Defense Fund
- The Texas Central High Speed Rail project, a 240-mile high speed rail line between Houston and Dallas, is expected to generate nearly 40,000 jobs, including in steel mills in Indiana and Colorado
- Solar power creates jobs 17 times faster than the U.S. economy, according to a report from the International Renewable Energy Agency
Infrastructure investment not only helps our economy, but our environment, as these two examples illustrate:
- The Genesis Solar Energy Project, a Mojave Desert solar power station built in 2014, saves 330,000 tons of CO2 a year, equal to 68,000 passenger vehicles.
- Shifting to a 90% zero-carbon power grid by 2035 could decrease health and environmental costs in the U.S. by $1.2 trillion and avoid 85,000 premature deaths over the next 30 years, per a 2020 study from the Goldman School of Public Policy at the University of California-Berkeley
A sign of things to come?
The benefits of infrastructure investments also include saving lives. In 2007, Minnesota’s third busiest bridge, the I-35W Mississippi River bridge, collapsed during rush hour. As a result, 145 people were injured; 13 were killed. Inspections 17 years earlier had marked the bridge as “structurally deficient,” and in 2001 cracking was found. The necessary infrastructure investment, however, was ignored. That bridge is hardly unique. The last 10 to 20 years have seen numerous bridge collapses including this past summer, when Nova Scotia’s 70-year-old Tittle Bridge collapsed just months after an inspection rated parts of the bridge in “fair” and “poor” condition.
According to the American Road & Transportation Builders Association, 47,000 U.S. bridges are currently “structurally deficient and in poor condition” and 235,000 U.S. bridges need “repair, replacement or major rehabilitation.” The cost of these repairs is nearly $171 billion. The Association also reports that “Cars, trucks and school buses cross these compromised structures 178 million times every day.” The next bridge disaster is a matter of “when” and not “if.”
The cost of status quo
Everywhere, problems are obvious, from our schools, where more than half need to replace multiple systems such as heating, ventilation or plumbing, to our forests where West Coast fires caused by faulty powerlines scorch the earth. Yet, despite these needs, federal infrastructure investment has been lacking. In fact, Federal government infrastructure spending as a portion of GDP has been cut by a third over the past 30 years.
While inaction continues, the problems related to our deteriorating infrastructure are getting worse.
- According to a report by the NCSL (National Conference of State Legislatures), 60% of U.S. power distribution lines have surpassed their 50-year life expectancy, and are at risk of failing. The report warns that there will be a $137 billion funding gap for power distribution and transmission by 2025.
- The current cost of U.S. traffic congestion in fuel and lost time alone is nearly $180 billion a year according to the 2019 Urban Mobility Report, and in the last 10 years has risen in our nation’s top urban areas by 48%
- According to S. DOT, an estimated 40% of all buses are in “marginal or poor condition” and transit asset maintenance faces a $98 billion backlog, a number that is expected to grow by more than a third over the next 20 years
- The cost to the U.S. economy from flight delays and cancellations (due to the poor state of U.S. airports) is more than $35 billion a year, according to the Council on Foreign Relations
- According to an ASCE report, the infrastructure investment gap costs households in the United States $3,100 a year, a number that is predicted to double in the next 20 years
The sustainability of metal
Infrastructure investment means more metal, which supports the families and communities that rely heavily on North American manufacturing jobs. More metal also can make a positive environmental impact. “Structural steel is the premier green construction material. Its high recycled content and recycling rate exceed those of any other construction material,” reports the American Association of Steel Construction. Structural steel contains 93% recycled steel strap (on average), and 98% of the steel will eventually be recycled into new steel products. The sustainability of aluminum is also well documented. Not only is aluminum a “100 percent recyclable and sustainable metal,” according to the Aluminum Association, but production improvements have reduced the industry’s carbon footprint by 40% over the last 25 years.
The time to build is now
We’ve hit a crossroads and the days of inaction must come to an end.
Just think of it. Better infrastructure would mean less time and money spent in traffic, fewer vehicle repairs from potholes, cheaper freight and transit costs, improved public health, faster internet and shrinking the “broadband gap,” better schools, a cleaner environment, and more demand for steel, aluminum and other metals at a time when industrial metals shipments are declining. Sign up to join the Time to Build movement to receive updates, news, alerts and actionable ideas. Spread the word to your colleagues. Share photos of infrastructure in disrepair and share it on your social networks with the hashtag #letsbuildnow. By signaling your support of the need for investment and funding, you will help give the metals industry a much needed boost, but the biggest benefits will go to everyone in North America. Says MSCI President and CEO M. Robert Weidner, III, “It is difficult to see the future now, but we must try. We cannot simply hope for a better tomorrow. We must build one.”
Yes, the Time to Build is Now. And we will all have to work together to build support, build momentum, and build awareness of the need for infrastructure investment.