Engineering, Construction & Real Estate

Something exciting about infrastructure

In times like these, when the economy is gasping for growth and people need jobs, infrastructure may actually hold the key to a turnaround. Given the right approach, the multipliying effect of infrastructure spending can bring in the most desired results for growth and employment.

Infrastructure includes the engineering, construction, and real estate sectors. Any discussion of this sector in the present context cannot escape its close link with the ongoing crisis, both as a cause and an after-effect. If the collapse of the U.S. housing market triggered the financial crisis, it is infrastructure spending that bore the brunt of the subsequent slowdown. The ripple effects of the recession led to cancellations and delays in planned investments. At a time when there is mounting pressure on existing facilities, this should be a matter of concern for the civic and government authorities. As it now stands, the highway, public transit, and aviation sectors in the U.S. need comprehensive upgrades, while water and sewage systems require additional investment. The total repair costs are estimated at about $2.2 trillion.

The Obama Administration recognizes this, and has allocated $132 billion of the total $787 billion provided under the U.S. economic recovery bill for infrastructure spending. This allocation includes programs for roads, transit, the development of a smart energy grid, and an $8 billion down payment for high-speed rail. However small this amount may seem compared to the requirements, it should jump-start numerous “shovel-ready” projects like road construction, bridge retrofits, public-sector building renovations, mass transit system upgrades, new power and water treatment plants, as well as alternative energy grids.

In countries across the globe, the situation is similar to that in the U.S. Governments are suddenly becoming serious about infrastructure spending and are using stimulus bills to take up new projects. In many parts of the world, population growth, demographic changes, and years of deferred investment have made the demand for new infrastructure and upgrades almost insatiable. The grim economic situation has offered an opportunity to address that requirement.