Like many other industries, the construction industry is struggling to keep going. The past decade has been filled with financial downfalls and world-changing events that have hurt the industry as a whole. Fortunately, stimulus packages are being distributed by governments, and construction companies will soon receive stimulus help. In this article, a Raleigh contractor license defense attorney discusses the possible impact of stimulus programs on the construction industry.
A key driver behind this potential growth is the anticipated rise in infrastructure spending as a component of the COVID-19 stimulus packages, which comprises an estimated $1 trillion aimed at revitalizing the US economy. The expected growth in infrastructure spending is projected primarily in the private sector, with government spending on roads, bridges, airports, and other infrastructure projects spread out over a number of years. Government infrastructure spending includes tax incentives, local infrastructure improvement programs, and direct payments to local residents for their construction projects. While infrastructure spending by businesses can serve to diversify their portfolio, the sudden pickup in interest rates, stimulus money, and an overall sense of optimism regarding the US economy can create great opportunities for smaller construction companies to capitalize on this upswing in the construction market.
One of the most lucrative aspects of undertaking infrastructure projects is that there is a plethora of different financing options available for these projects, particularly among non-traditional lenders. Bridge loans are also popular with construction managers looking for short-term funding, especially as unemployment continues to rise in the construction industry and projects take longer to complete. In addition to short-term financing from local banks, construction managers may also look to raise funds from state and federal agencies that offer loans at affordable interest rates to alleviate financial pressures and to tackle infrastructure projects stemming from the stimulus plan.
Fewer New Home Builds
In general, there will be fewer new home builds regardless of how the stimulus programs go. People simply won’t have access to the financing needed to build a new house. However, for those people that haven’t been as impacted by the pandemic through job loss, they may decide to use the stimulus money to invest in renovations in their existing home since they spend more time there now.
Ability to Weather Tough Times
With the ability to weather these tough times, construction will continue at a high rate. The stimulus can help to make sure that more construction companies are able to weather these tough times, keep their employees, and stay in business. When the economic picture gets better, construction should pick up again, and the economy can go back to the way it was before the downturn began.
If the government does enough to help the construction industry weather the storm, the industry will flourish. It’s important that whatever steps are taken are backed with sound fiscal policy, future thinking, and a good understanding of both the global and local economies. Without a sound plan in place to remedy the problems associated with operating a business in a pandemic, the ability to weather lean times will continue to be hindered.
Increased Focus on Clean Energy and Net-Zero Carbon Targets
The current administration has an interest in supporting the clean energy transition and encouraging more companies to reach net-zero carbon emissions targets. It is possible that there will be some additional stimulus money available to companies that want to work on green projects, including companies in the construction industry. When bidding on government infrastructure projects, it can be a good idea to highlight any green or clean energy initiatives that your company has in place.
Related: Important Elements of Net-Zero Construction
Encourage Projects to Continue
Many people within the construction industry have seen this stimulus plan as a good chance to encourage construction projects to go ahead so that they can provide jobs for all Americans. Unlike jobs in many other industries, construction jobs take place here in the United States and cannot be completed overseas by outsourced international providers. The hope is that this stimulated construction spending will encourage other federal agencies to go ahead and assist construction projects in getting started. As companies in the private sector feel more confident in their long term outlooks, too, there are plenty of opportunities down the line for more commercial construction projects that might otherwise not exist.
Our team of Raleigh construction law lawyers can help your company enroll in a stimulus plan to ensure that your company receives some of the available support. Having a lawyer can also help you with a lot of other legal issues that can arise. If you have questions about how stimulus programs can affect your construction company, contact a Raleigh construction lawyer from Cotney Construction Law.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.