Thursday, March 23, 2023

USA: Inflation affects infrastructure projects

The price of one foot of water pipe has increased by 19% in Tucson, Arizona. The cost of a ton of asphalt in a small town in Massachusetts, 37%. Estimates for construction of a new airport terminal in Des Moines, Iowa are now 69% higher, and are delayed by several years.

Inflation is affecting infrastructure projects across the United States, driving up costs so much that state and local officials are being forced to postpone or reduce projects and rethink their priorities.

The pricing has already detracted from the $1 trillion infrastructure plan that President Joe Biden signed into law just seven months ago. That law included, among other things, a roughly 25% increase in the regular financing program for roads to states.

“Those dollars are essentially evaporating,” said Jim Tyman, executive director of the American Association of State Highway and Transportation Officers. “The cost of those projects is going up 20%, 30%, just eroding the federal government growth that we were so excited about earlier this year.”

In Casper, Wyoming, the lowest bid a few months ago was $35 million in a bid to rebuild a major intersection and build a new bridge over the North Platte River, 55% higher than state engineers estimated. The proposal was rejected and the project was shelved as state officials reevaluated their options.

“If this inflation continues, we will have to postpone projects from this year to the next, and to the next, and the next,” said Mark Gillette, director of engineering at the Wyoming Department of Transportation.

Gillette hoped that the federal Employment and Infrastructure Investment Act would accelerate road and bridge construction.

“It won’t be as much as we expected,” he admitted.

In addition to roads, federal infrastructure initiatives include billions of dollars for water, rail, airports, broadband Internet, power lines and clean energy projects over the coming years.

Inflation has hit all sectors of the US economy, emerging as one of the biggest challenges for Biden during a year ahead of legislative elections. The cost of fuel, food and housing has skyrocketed. According to the Labor Department, consumer prices in May rose 8.6% from a year earlier, the highest rate since 1981.


Lieb reported from Jefferson City, Missouri and Casey from Boston.


Associated Press writer Josh Bok in Baltimore contributed to this report.

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