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Congress Passes the Infrastructure Bill

Government Makes Its Biggest Investment in Infrastructure in Over a Decade

After months of debating, Congress passed an infrastructure bill. Once it is signed into law by President Biden, the bill will put billions of dollars toward repairing and improving the nation’s infrastructure. The spending, which will be spread out over about five years, marks the biggest investment in US infrastructure by the federal government in over a decade.
Of the money, $110 billion will go to repair roads and bridges while $39 billion is slated to upgrade public transit. Congress has earmarked $66 billion to improve and modernize the nation’s railroads. Billions will also go toward making highways safer, implementing an electric vehicle-charging network, developing zero-emission ferries and buses, building out broadband infrastructure, and protecting the country against cyberattacks.

Infrastructure Money Coming Soon

Money from the $1 trillion infrastructure bill is expected to begin flowing in the next few months, presenting an opportunity for manufacturers in the US. After all, the bill will spur years’ worth of infrastructure projects which will drive demand for everything from construction materials to heavy machinery. Upgraded ports, airports, and roads will also ease bottlenecks seen in recent months, helping companies reduce supply-chain costs.

It will take some time for the benefits from the infrastructure bill to show up on companies’ bottom lines but many are hopeful about the long term. For example, surveying equipment maker Trimble (TRMB) expects the infrastructure bill to boost its business with the benefits showing up in 2023 earnings.

Steel Makers Expect to See Increased Demand

Steel makers including US Steel (X), Cleveland-Cliffs (CLF), and Nucor (NUE) are also poised to benefit as infrastructure projects get up and running. As it stands, the steel industry is seeing strong demand, producing 20.26% more tons of crude steel so far in 2021 compared to a year ago. Capacity utilization for the steel industry stands at 81.1%, up 66.8% compared to the same period last year.

Many manufacturers are already struggling to meet current demand but are confident they can handle an influx of orders spurred on by the $1 trillion infrastructure bill. It’s going to take several months before construction projects get off the ground, giving manufacturers time to catch up.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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