Since arriving in the United States the Coronavirus pandemic has taken a devastating toll on nearly every aspect of our economy. Industries such as construction have faced new hardships and challenges with workplace safety, material and supply chain logistics, labor shortages, communication and business development. As construction firms continue to weather the financial burdens of the economic downturn, the federal government has passed another stimulus bill ripe with infrastructure and construction spending.
In March 2021, President Joe Biden signed the American Rescue Plan Act into law intended to serve as the third federal stimulus package during COVID-19. Included in this new legislation is the appropriation of $3 billion for the development of public facilities, public services, business development, planning, technical assistance, training, and any other assistance to alleviate long-term economic deterioration and sudden and severe economic dislocation due to the pandemic.
So what does this mean for the construction industry?
More infrastructure spending, more large scale joint ventures, more DBE opportunities and increased bonding. City and state governments will now have increased funds to carry out major development and projects to improve vital infrastructure. Specifically, the American Rescue Plan Act earmarks $365 billion for direct funding to state and local governments for infrastructure projects improving transportation, water, sewer and broadband networks. Funds will remain available through the end of 2024, unless exhausted before that time. The restrictions on how these funds can be used at the state and local level have lowered significantly in comparison to the stimulus package found in the CARES Act of 2020.
For cities and towns, the amount of funding each municipality will receive depends on the size of its population. Nearly 75 percent of funding will go to cities with at least 50,000 residents, with the remainder of funds going to towns with fewer residents. This increased funding is certain to create more opportunities for growth as the construction industry rebounds from the impacts of COVID.