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ASCE’s Report Update Highlights Major Infrastructure Investment Funding Gaps

Every four years, the American Society of Civil Engineers (ASCE) publishes The Report Card for America’s Infrastructure, which grades the current state of national infrastructure categories on a scale of A through F. The newest report, titled Failure to Act: Closing the Infrastructure Investment Gap for America’s Economic Future released last week, is an update to the 2012 Failure to Act comprehensive report. The 2016 report update addresses the current infrastructure gaps between today’s needs and investment and how they will affect the future productivity of industries, national competitiveness and future costs to households. To learn more about the newest report update, read on!

The report states that if the investment gap is not addressed throughout the nation’s infrastructure sectors by 2025, then the economy is expected to lose almost $4 trillion in GDP, resulting in a loss of 2.5 million jobs in 2025. ASCE posits that closing each infrastructure investment gap is possible, and the economic consequences caused by these gaps are avoidable with investment. While the report acknowledges modest improvements in several sectors, including the nation’s electricity infrastructure, a magnanimous investment funding gap exists across all sectors.

ASCE estimates the investment funding gaps by sector in the short-term (from 2016 through 2025) and the long-term (from 2016 through 2040) to illustrate the potential tremendous economic consequences to the U.S. economy. For the electricity sector (which includes electric generation, transmission and distribution), ASCE estimates that the cumulative investment gap from 2016 through 2025 will amount to $177 billion and up to $565 billion from 2016 through 2040. The report however, does not account for the recent fundamental shifts in generation technologies in its analysis, such as the Clean Power Plan, because it is expected that implementation will not occur until 2017 if the Plan is implemented.

ASCE posits that the investment gap in the electricity sector will lead to higher costs of manufacturing associated with rising and unreliable energy delivery. This trend will affect sales by U.S. companies in global markets by driving up production costs and sales prices; and exacerbate the national trade deficit by seeing lower volume of sales to U.S. businesses if more efficiently foreign-made products can be imported and sold at cheaper prices. These two dynamics will also affect employment and decrease household and income. The report update acknowledges that the findings are analytical and do not offer policy or funding prescriptions. However, it illustrates the huge need in infrastructure investment that if left unattended, will lead to huge economic consequences.

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Thomas R. Burton, III

Member / Chair, Energy & Sustainability Practice

Tom Burton has helped to shape the clean energy industry by drawing on his passion for innovation. As a Mintz attorney, Tom counsels investors, entrepreneurs, and Fortune 100 companies. He also guides start-up organizations and accelerators to foster the next generation of energy leaders.

Sahir Surmeli

Member / Co-chair, Energy & Sustainability Practice

Sahir Surmeli is a Mintz business counselor who advises companies, boards, entrepreneurs, investment banks, and venture and private equity investors as they build and grow companies. He handles public offerings, 144A and private financings, acquisitions, joint ventures, and strategic partnerships.