US infrastructure: Plans, progress and the path to growth
The global pandemic has not dampened enthusiasm for infrastructure investment in the US. Investors and developers are looking to increase their stakes in multiple sectors and states
Foreword
The US infrastructure market is at a critical juncture. President Biden's approximately US$1 trillion plan for investment in key infrastructure asset classes has attracted bipartisan support. That paves the way for large-scale spending across the country, with investment in transport, energy and power, water and digital connectivity at the center of proposals that offer the prospect of fundamental transformation.
President Biden's plans reflect a twin imperative: to renew and modernize US infrastructure, but also to provide further stimulus to the US economy as the recovery from the COVID-19 pandemic continues. The combined effect could be an unprecedented boost for the US infrastructure market.
Against this backdrop, White & Case, in association with Acuris Studios, surveyed key US infrastructure market participants—the public authorities commissioning new projects and the investors, financiers and developers who will fund, deliver and manage them. Our survey results reflect on current market sentiment, identify the opportunities that participants are prioritizing and pinpoint the challenges.
Boosted by substantial support from the Biden administration and rising demand for infrastructure investment both in the US and internationally, our research reveals that the mood is upbeat with four main findings:
1. Growth industry
Respondents see the US as a land of opportunity. Their intentions are to grow not only their investments in US infrastructure, but also the size of their teams.
2. The COVID-19 effect
While the majority state that the pandemic had a negative effect on levels of investment in US infrastructure, it also prompted respondents to consider new practices including investing in a more diverse set of assets and improving digital technology.
3. Sector watch
While transportation (in particular, roads, tunnels and bridges) is seen as the key investment sector in 2022, social infrastructure has rocketed up the agenda due to the pandemic and the growing influence of environmental, social and governance (ESG) issues.
4. A connected future
Sustainability and technology are the watchwords for respondents when it comes to futureproofing their infrastructure investments.
Methodology
In the third quarter of 2021, White & Case, in partnership with Acuris Studios, surveyed 85 senior-level investors that have, or plan to, develop/fund/invest in US infrastructure, and 15 public authorities that have awarded or plan to award a PDA, DBOM, DBFOM or lease for the development or replacement of US infrastructure.
Investors surveyed included infrastructure funds, pension funds, sovereign wealth funds, sponsors, developers, institutional investors and commercial banks.
The COVID-19 effect
While the effects of COVID-19 were unsurprisingly largely negative, the pandemic did prompt most respondents to weigh new opportunities and ways of working
A changing world: Technology, ESG and climate change
The pandemic has irreversibly hastened existing trends in the world of infrastructure. Digitalization, ESG considerations and climate change are no longer side issues, they are fundamentals
Looking ahead: The future for US infrastructure
Respondents are broadly optimistic about the outlook for the US infrastructure sector, but there is no room for complacency. In this final chapter, we explore funding and future plans and reveal seven key factors for infrastructure success
