Trump's Potential Impact on Construction
Love him or hate him, Donald Trump won the election and is now our President. No matter what side of the aisle you’re on, we can all agree that increased infrastructure spending is good news for the construction industry. During the presidential campaign, candidate Trump made many promises on a broad cross-section of issues. Whether you agree with his ideas or not, there are a number of items that could affect construction:
- American Energy & Infrastructure Act – The President pledged to work with Congress to leverage public-private partnerships and private investments by utilizing tax incentives to spur an estimated $500 billion-$1 trillion in infrastructure spending over the next ten years including renovation projects on highways, bridges, airports, utilities and railways.
- Regulatory Reforms – The President has also been very outspoken about scaling back many of the government's "intrusive" regulations. This includes regulations issued by Federal agencies such as EPA, OSHA, Department of Labor, etc. that slow down, add cost or even make construction projects prohibitive. Streamlining regulations is something most business owners believe will positively impact their business.
- Unions – He wants to work with union leaders creating more middle-class jobs. The President's early meetings after his inauguration included leaders of several construction and building trade unions. Working with traditional supporters and opponents can help to bridge differences and hopefully effect changes that benefit all.
- Specific Project Initiatives – The Keystone XL pipeline and the Dakota access pipeline, which could create an estimated 28,000 jobs, have been revitalized. President Trump has set in motion renegotiations that President Obama terminated. It's clear he wants the projects started.
- Tax Reform – He has promised to reduce taxes for individuals and companies. For individuals, his plan includes three income brackets, rather than the current seven brackets, with lower applicable tax rates. For businesses, the current corporate tax rate of 35% would be reduced to somewhere between 15 and 20%. These reductions could help the homebuilding industry and definitely stimulate companies to aggressively pursue capital projects.
The construction industry is currently 1.237 million jobs short of its peak in 2007. Construction firms can hope that the new President will continue to expand the economy, create jobs and build a strong infrastructure that is critical to our national security.
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