Nonresidential construction, although seasonal, has increased 16% year-to-date as of the end of May and shows no signs of slowing down anytime soon.
With the 2015 approval and funding of the Fixing America’s Surface Transportation (FAST) Act, which provides $305 billion in funding over the next 5 years, more emphasis has been placed on heavy industrial construction on a national level. So, what exactly does this mean for industry participants?
Overall, this new law will provide much needed certainty to state highway transportation agencies and public transit systems to plan and complete capital projects. It also gives state and local governments much more flexibility in determining how to allocate funding for our nation’s critical infrastructure needs.
Commercial construction professionals are expected to see a new wave of opportunities from this new initiative, including:
Job growth and overall business growth. The increase in long-term and larger-scale infrastructure projects as well as the faster-paced project timeline creates a higher demand for hiring and, just as importantly, retaining field personnel to ensure consistency in project teams throughout the life of a project.
Acceleration in project delivery. The FAST Act will likely lead to a more streamlined approval process and a focus on the timely delivery of transportation projects.
Creation of a predictable revenue stream. Commercial construction business owners will not be left in the dark when it comes to funding. This law takes the guesswork out of the “funding stream,” as it will be much more predictable and transparent for an extended period of time. This, in turn, will allow firms to hire and train for long term.
As we speak, many of the FAST Act implementation phases have gone into full effect and U.S. commercial construction companies are already seeing this newly passed legislation create new contracts just in time for the height of this year’s construction season. The expectation is this momentum will continue to build with even greater volume of longer term projects occurring in the 2017 season.
Although competition will be intense, those construction companies that are prepared for the challenge will thrive with the passage of this bill. That being said, increased focus on mobility of access to data when and where needed in the field and staff retention and training will be the key to achieving the significant opportunities that have been created.