As 2023’s economic landscape materializes, it may be valuable to take a quick look back at 2021’s infrastructure funding bill and the implications for surety producers. Dan Pope, Senior Vice President of Underwriting at Old Republic Surety, gave a concise review of the $1.2 trillion package in a Rough Notes article that’s worth a second look as we enter a rocky 2023.
If you have driven a highway anywhere in the country in the last few months, you probably encountered roadwork, some of which is funded by the $1.2 trillion 2021 Infrastructure Investment and Jobs Act, which contained $550 billion for infrastructure to be doled out through 2026. That spending may help prop up the construction industry even as commercial construction and housing starts falter – with a projected decline of 3% in 2023 across all U.S. construction, according to the 2023 Dodge Construction Outlook.
The federal money is slated to be distributed to states and municipalities over the next few years for projects such as bridges, roads, power grids, and airports, all of which will require bonds. Difficulties, however, are expected even after government decides who gets what. There are qualified-labor shortages, inflation, a looming recession, and credit tightening to grapple with, all of which will affect contractors’ qualifications for surety bonds.
Dan Pope, Senior Vice President of Underwriting at Old Republic Surety, provides a summary of the infrastructure-funding bill and its implications for contractors and bond producers in his Rough Notes article “What Infrastructure Spending Means for Surety Bond Producers.” It may help producers plan for a potentially bumpy road ahead, so check it out to get ready for the new year.