How a Biden Presidency & COVID-19 Could Impact Infrastructure Development
Infrastructure, from cities to airports, roads to bridges, is critical to the nation and its economy. Since January 2019, two major events, COVID-19 and Joe Biden's election to the Presidency, have arisen that impact our infrastructure and its investment potential for interested individuals. This article by Global X examines these two events.
COVID-19 and the election results have shaped the nation in the following ways:
- Shutdown businesses and increased unemployment by 40 million Americans
- Driven interest rates to historic lows
- Highlighted a strong partisan divide in the political realm
- Resulted in a Democratic President and House majority instead of the previous Republican majorities
These changes have a direct impact on the development of infrastructure now and in the future. Here is a look at the biggest changes to occur:
Thanks to the pandemic, residing in close quarters in an urban environment has lost some of its appeal. In major cities, more residents are looking to leave than are looking to move in, with 80% more people looking to leave New York City than looking to live there.
This shift in preference means that the following infrastructure changes may be necessary :
- More space and resilience in urban infrastructure to accommodate both collaboration and social distancing
- Creation of more space and diversity in public transport to limit the spread of disease
- Scale up of digital infrastructure to accommodate new cloud computing and work-from-home trends
A core aspect of Biden's election platform was revitalizing infrastructure with a $2 trillion overhaul to reduce emissions, create jobs, and improve digital infrastructure. Here is a look at some of the changes this overhaul would create:
- Revitalizing physical infrastructure, including roads, bridges, commercial infrastructure (such as ports), retrofitting and new building construction, and ensuring delivery of fresh water via pipeline revitalization
- Creating infrastructure to support clean tech, reduce the carbon footprint of the nation's buildings, create electric vehicle charging stations, and develop a low-carbon manufacturing center
- Create digital infrastructure by making high-speed Internet available throughout the nation and creating infrastructure to support smart cities
Once he takes office, President-elect Biden is likely to use a number of tools to make these infrastructure changes, including the following:
- Including infrastructure investment in any future stimulus bill
- Issuing relevant executive orders
- Appointing staff to executive appointments who are willing to support his approach to infrastructure
A number of individuals and businesses will benefit from these changes in infrastructure, including those involved in obtaining raw materials, construction, engineering, manufacturing, and aspects of the digital age. Infrastructure is part of our Real Assets portion of the portfolio.