U.S. Infrastructure Growth Expected to Continue Post-Election
According to Global X, the United States is experiencing an infrastructure renaissance due to strong inflows of public and private spending.
First, funding from the IIJA, CHIPS Act, and IRA are slated to add potentially hundreds of billions more dollars into the U.S. infrastructure value chain over the next several years.1 Funds from the IIJA, for example, were only about 60% allocated as of August 2024, and even more funds have not yet been spent as many projects are still in the planning phase.2,3 Additionally, a byproduct of this legislative wave is the related private spending for manufacturing and cleantech, which to date totals over $988 billion.4 The continued buildout of manufacturing facilities and clean power projects requires significant resources, notably labor. According to one estimate, announced investments from the CHIPS Act alone could create around 115,000 construction and manufacturing jobs.5
Following the Republicans’ election sweep, it’s understandable why market participants have questions about the fate of these infrastructure-based laws. But in our view, it’s worth noting that infrastructure is typically a pillar of focus for both Republican and Democratic administrations and lawmakers at all levels. The IIJA is also known as the Bipartisan Infrastructure Law, as the bill received support from members across both parties in the House and Senate.6 Also, while no major infrastructure spending package was passed during Trump’s first term, both parties continually expressed interest in increasing federal support for infrastructure.7 Given that infrastructure typically garners cross-party support, and the fact that over 60,000 infrastructure projects have already received IIJA funding, we believe that the IIJA is likely safe from being rolled back or significantly altered.8
Similarly, we believe that the CHIPS Act is likely safe from repeal or significant modification, despite talk of a repeal on the Trump campaign trail. The CHIPS Act also passed with bipartisan support, against a backdrop of intensifying geopolitical tensions.9 One of its primary objectives is to support national security by increasing the supply of critical technologies, particularly the chips that are critical for defense and everyday items.10 Since its enactment in August 2022, the strategic importance of advancing leadership in AI and semiconductor manufacturing has become even more pronounced. That said, the incoming administration may have different ideas for where to allocate the remaining funds. As of late September 2024, the Biden administration had awarded $36 billion out of the $52 billion set aside for semiconductor manufacturing to companies like Intel, Micron, and Taiwan Semiconductor Manufacturing Company (TSMC).11
