The Infrastructure Investment and Jobs Act (IIJA) is a new piece of legislation from the United States Congress which is aimed at improving the US economy by providing increased funding for infrastructure projects. As such, the IIJA is likely to have an impact on many businesses, ranging from those that are involved in the actual construction of infrastructure to those that merely provide services or materials to firms working on infrastructure projects. The question that many businesses want to know is: do they expect the IIJA’s funding to impact their firm?
The answer to this question depends on a variety of factors, including the type of business and the specific region they are in. For example, if the business is involved in directly constructing infrastructure, then they are likely to expect a positive impact on their business as the IIJA provides increased funding for these types of projects. On the other hand, businesses that merely provide services or materials to construction firms may not experience a significant impact from the IIJA as the increased funding does not directly apply to them.
When it comes to the timeline for when states and localities in the US are expected to begin advertising Infrastructure Investment and Jobs Act-funded projects, the answer can vary. It largely depends on how quickly the money from the IIJA reaches the states and localities, as well as their individual processes for bidding and awarding contracts for infrastructure projects. Generally speaking, however, most businesses should expect to see states and localities in their area start advertising IIJA-funded projects by the summer of 2021.
For businesses that are expecting to see an impact from the IIJA, it is important to consider how this impact might affect their backlog over the next couple of years. Depending on the size and scope of a firm’s operations, they could expect to see anywhere from a 5% reduction in their backlog to more than a 50% reduction. Firms should also consider how they are staffed, as having an optimal staff level is essential when managing an increased workload.
Finally, businesses should consider any potential effects the IIJA may have on the costs of construction materials. While it is normal to expect some fluctuation in the prices of materials year over year, the IIJA may provide additional incentive to increase the price of materials, particularly in regions where there is an increased demand for construction projects. This is something that businesses should be aware of as they consider their future budgets and prepare for any potential increases in prices.
Overall, the Infrastructure Investment and Jobs Act presents both opportunities and challenges for many businesses. By understanding the potential impacts the IIJA may have on their firm and taking proactive steps to prepare themselves, businesses can better ensure they will remain competitive in the coming years.
