Some Hope for Engineers? Obama Lays Out Plan

I try and stay away from politics – mostly because it’s overdone and, usually, boring to write about. So, while this post does include information about President-elect Obama’s plans for infrastructure, the discussion is purely within the context of the plan and nothing further should be inferred.

Mr. Obama stated over the weekend that he intends to invest in the country’s infrastructure in the largest amount since the Eisenhower Administration. This is a critical component that the federal government has been ignoring for years, and arguably perhaps its most important duty behind national defense. The country’s infrastructure has been failing for years – its most glaring example was the tragic bridge collapse in Minnesota last year.

In 2005, the American Society of Civil Engineers graded the country’s infrastructure – and it earned a miserable D. In the three years since that report card was scored, they conditions of the country’s infrastructure has only deteriorated, so we’d be lucky to earn a ‘D’ if ASCE does another score. ASCE estimates that it will take $1.6 trillion over the next five years to upgrade the country’s infrastructure. That was in 2005 dollars, so with the further deterioration and inflation, we can expect that number to be closer to $2 trillion.

Mr. Obama has not said what level of investment he is proposing – that his advisors were “busy working, crunching the numbers, looking at the macroeconomic data to make a determination as to what the size and the scope of the economic recovery plan needs to be. But it is going to be substantial.”

The mere comment is a boon to engineering companies. The news of the plan caused publicly traded construction services’ stocks to increase. Many of them increasing dramatically – 30% and more. Jacobs Engineering, which employs more than 43,000 people, was up nearly 16% today.

Not shockingly, several governors (all but one, Governor Schwarzenegger of California, were Democrats) came out in support of the plan.

It will be interesting to see the bones of the plan – to see what kind of projects would actually be funded. Mr. Obama hinted at the projects, which would include roads, bridges and upgrading public buildings to make them more energy efficient. He also stated that the money would be “use it or lose it” in an attempt to makes states quickly deliver projects. Personally, I’m in favor of just about any plan that upgrades the country’s infrastructure.