US construction, chem industry optimistic about Biden infrastructure plan

Author: Janet Miranda

2020/11/12

HOUSTON (ICIS)--US President-elect Joe Biden’s extensive infrastructure plan, known as the Build Back Better programme, could help the non-residential construction sector stave off job losses and stimulate growth in the chemical industry.

The plan aims to create millions of jobs and rebuild infrastructure including roads, bridges, green spaces, and water systems to withstand the impact of climate change.

A Biden infrastructure plan could look similar to a US House of Representatives $1.5tr infrastructure bill passed in July, said Jimmy Christianson, vice president of Government Relations of the trade group Associated General Contractors of America (AGC).

However, the chances of an infrastructure bill depend on the priorities of the incoming White House, as coronavirus (Covid-19) pandemic cases begin to surge once again, said Christianson in an interview with ICIS.

The American Society of Civil Engineers (ASCE) has issued a near-failing grade for the country’s overall infrastructure for several years running, including most recently in 2017 when they gave the US a D+.

Consultants have previously warned that if nothing is done to improve the country’s infrastructure, the result could cost the petrochemical industry billions.

In 2018, the Trump Administration put forward a $200bn infrastructure plan with the other $1.3tr kicked in by states, cities and private investors. $100bn would be incentive grants and the remaining would go towards rural projects, refinancing programmes, and "moonshoot projects".

Trade groups like AGC have emphasised the need for an infrastructure plan to reduce unemployment in the non-residential construction sector amid increasing project delays and cancellations.

“Our industry thrives on building the infrastructure needs of the country,” said Christianson. “As we are in these uncertain times with the pandemic, ensuring that we have markets to sustain the industry is important. Federal leadership and funding will not only help our country in the long term but sustain the construction economy.”

The American Chemistry Council (ACC), which advocates for chemical businesses, is also “quite supportive” of a bipartisan infrastructure bill, said Scott Openshaw, senior director of communications for the trade group.

Many end products that are made by the chemical sector are used in the construction of infrastructure projects.

Around 4% of the value of non-residential construction spending goes to the chemicals sector including into plastics and rubber products, according to Kevin Swift, chief economist at the ACC. He said his comments in an interview with ICIS.

In 2019, 3.51bn lb (1.59m tonnes) of specialty chemicals such as additives, adhesives, sealants were consumed in the US, for a value of a little over $5bn just in those products, said Swift.

In the construction of building and renovating existing water lines and sewage systems, PVC pipe is also a “very competitive” product.

Despite Biden’s win, any infrastructure bill would have to go through the Senate, where Biden’s party will likely hold a minority.

Although, the upper chamber leadership hinges on the results of Georgia’s special election in January for its two senate seats, there are hopes that even in a divided government, an infrastructure bill could pass.

“I think that there is some feeling out there that even with a divided Congress that folks might be able to come together on in some way, shape or form,” said Openshaw.

Interview article by Janet Miranda

Thumbnail image shows a construction site. Source: Shutterstock