Presidents usually significantly impact the rules affecting contractors. Therefore, it is necessary to try and examine what contractors can expect under Biden's administration. The reason why presidents have such great power over these rules is that different requirements can go through executive orders.
According to a recent DataBid blog titled Illinois construction industry is starting to show signs of life, the construction industry can expect both challenges and opportunities from the new administration. We can expect to see some changes in infrastructure spending, taxes, and different regulations. Also, union support for immigration needs some consideration. Biden has also proposed the expansion of broadband networks in rural areas. He has a plan to direct a considerable financial injection toward healthcare and education as well. Should his proposals pass through Congress, it will give a significant push to the construction industry.
Infrastructure Spending
An article in Construction Dive stated that we can expect millions of new job openings in infrastructure, housing, construction and other projects. According to Jimmy Christianson, the vice president of government relations at the Associated General Contractors of America, the infrastructure here implies a broad definition of it. It will include the following:
- Surface transportation
- Waterfront
- Aviation
- Civil works
- Projects dedicated to flood control and renewable energy
- Clean drinking water supply systems
There is also the possibility that Biden's administration will include the propositions related to infrastructure that the Democrats put forward. In July, the House passed the $1.5 trillion Moving Forward Act. This Act includes new highways, bridges, energy projects and schools.
Expected Growth
Global Data reports that the US construction industry is expected to grow by 1.4% annually on average by 2024. Given that mortgage rates have never been so low and there has been a considerable change in the workplace dynamics, with a significant number of people working remotely, we can anticipate a continued rise in housing demands. Moreover, we shouldn't forget the possibility of fiscal relief packages and the availability of vaccines, which also bring about an air of optimism.
Construction Dive states that there are some construction industry companies that have thrived during the pandemic and that things are definitely looking up. Considering that the future of the housing market is looking brighter, we can also expect Illinois-based businesses involved in the moving industry to see a successful year.
The Existing Issues and Possible Solutions
Despite the overall positive outlook on the immediate future of the construction industry, some challenges will continue to exist. For example, we can still expect to struggle with the lack of skilled labor, expensive land, and increasing costs of materials. These will continue to hinder investment in this area.
On the other hand, the new Biden administration will foster a more facilitating foreign trade environment. This should somewhat restrict the increase of construction material costs. Since Biden will probably reverse Trump's controversial policies regarding immigration, the shortage of labor may also be successfully resolved. Also, due to the lack of labor force in this area that has caused wage inflation, there has been an increase in project costs and home prices. Thus, this issue could also potentially be solved.
The Challenges
While the considerable financial infusion aimed at civil projects will undoubtedly benefit the industry, contractors must understand that Biden will not just hand them the money. The big fat check will come with some strings attached. One thing that contractors can expect under Biden's administration is to be held accountable for how they spend the funding they have been given and how they conduct their businesses.
The carbon tax has been a significant part of Biden's presidential campaign. So, while contractors will receive more money, they will also have to watch their greenhouse gas emissions. Moreover, we can expect that Biden will continue to give preferences to American-made products, just like Trump did. The difference may be that Biden could cooperate with multinational organizations like the WTO (World Trade Organization). Thus, it is highly likely that the importance of buying US-manufactured construction material will be emphasized. Finally, we already know that, unlike Trump, Biden has taken a more inclusive stance towards minorities.
Unions and Immigration
It appears that Biden's intention to strengthen worker organization will be one of the most significant issues for contractors. Democrats' pro-union legislation, such as the PRO Act (Protect the Right to Organize), passed in the House this year will help. However, its future will depend on whether the republicans remain the majority in the Senate.
According to Mike Bellaman, president and CEO of the Associated Builders and Contractors, the issue with this Act is that it could rip workers of their choice. Thus far, they could decide if they want to join the union or not. Bellaman reminded that 27 states had banned compulsory union membership. This means that workers can join a union if they wish to, but nobody can force them. And he warns that this Act will cancel that ban.
On the other hand, it is likely that the Biden administration will facilitate the legal employment of non-US citizens. As we have mentioned, this would help the skilled labor shortage. Over 100,000 construction workers are in the DACA (Deferred Action for Childhood Arrivals) or TPS (Temporary Protected Status) programs. President Trump, as we can remember, threatened to dismantle these programs. President Biden, however, could transform these programs into immigration packages.
Conclusion
All in all, it seems that what contractors can expect under Biden's administration looks promising for the most part, although they also can expect some construction sectors to decline according to a DataBid blog titled Contractors Expect Certain Construction Sectors to Decline in 2021. Still, there will be some challenges to overcome.
Editor's note: This is, indeed, a confusing time for the construction industry. DataBid is working tirelessly to report and distill the news that can help you and your company make the right decisions and keep you up to date on the constant changes as they are made. We hope our coverage brings some clarity amid all the confusion.
