Posted August 9, 2017

U.S. records lowest level ever of infrastructure spending

Many states have stopped construction projects to save money.

As scandals have paralyzed Washington, spending on infrastructure has reached its lowest level ever recorded during the second quarter of 2017, and experts say that has huge economic and safety implications. The U.S. spent only 1.4% of GDP on infrastructure projects, and Ken Simonson, chief economist at AGC, said many states, such as Illinois, have struggled financially and stopped construction projects to save money.

It’s basically the opposite of a major government infrastructure program.

Government spending on transportation and other public works is in decline as federal funding stagnates and state and local governments tighten their belts.

Such spending equaled 1.4 percent of the nation’s economic output in the second quarter of 2017, the lowest level on record, according to Census Bureau data.

In West Virginia, where President Trump on Thursday touted a vague $1 trillion infrastructure plan, public works spending has fallen for five straight years.

Nate Orders, who runs a construction company founded by his grandfather to build bridges for the state, said he had been forced to scramble for other kinds of business. Only three of the 15 projects on his current slate are bridges in West Virginia.

“My grandfather would not recognize the business we have today,” he said.

What’s worse, he said, is that he recently hit a highway pothole and had to replace a wheel. “We’re fortunate, I suppose, that we don’t have a growing population, so we don’t have a lot of congestion issues,” Mr. Orders said. “Our problem is safety.”

The deterioration of the nation’s infrastructure has raised widespread concerns about safety, quality of life and the impact on economic growth. Politicians in both parties have declared the issue a priority. So far, there is no sign of a solution.

In 34 states, spending on government construction projects was lower last year than in 2007, adjusting for inflation. The trend has continued this year. Public construction spending in June was 9.5 percent lower than during the same month last year.

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