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U.S. Infrastructure Plan & its Possible Lighting Impact

2021 04 infrastructure plan construction impact.jpg

President Biden's proposed plan could give lighting-related construction a lift while increasing taxes to corporations

 

According to the White House, the recently proposed The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China.

As you likely know, there are many steps of anticipated political wrangling that still need to happen before the plan is enacted by the U.S. Congress. The multi-year, multi-faceted plan touches on many construction projects that would involve new lighting -- and others that don't. For instance, replacing lead water pipes, funding child care and deploying broadband internet to rural areas won't likely have a direct impact our lighting industry. Yet there are many projects relating to construction that should give our industry a lift if the plan is enacted.

The plan is divided among four main areas:

  • $621 billion for transportation infrastructure.
  • $650 billion for upgrading homes, schools, hospitals and federal buildings.
  • $400 billion for caregivers for elderly and people with disabilities.
  • $300 billion for research, development and manufacturing.

Here are some of the specific subsets that could have an impact on lighting projects:

Roads and Bridges
Invest $115 billion in rebuilding bridges and upgrading 20,000 miles of roads. This seems like a boon for civil engineering related companies and asphalt suppliers. Perhaps many of those roads will get new lights, too.

Residential Renovation and New Construction
$213 billion toward building, renovating and retrofitting more than two million energy-efficient homes and buildings. The language of the proposed plan tends to focus on lower income residential areas which, in turn, would likely result in lower cost construction and lower-tier lighting products. Even if lighting represents 1-2% of the spend, that could provide an extra $2-4B of lift over time.

School Buildings
$100 billion to build new public schools and to upgrade existing buildings. Flat panel LEDs, high bays and controls anyone?

Airports
$25 billion in airport infrastructure improvements which would include terminal renovations. Light rail systems may get the biggest lift here, but there is a lighting and controls play here, too.

U.S. Manufacturing
$50 billion of the money would be invested in semiconductor manufacturing. Do we envision a day when high volume lighting semiconductors will be produced in the U.S. in mass scale? Probably not. But perhaps there could be some help in making domestic manufacturing of Level II LED boards and light engines much more affordable. Unlikely, but possible, we suppose.

Domestic manufacturers supporting clean energy and rural manufacturing would receive $52 billion. This relates to many aspects of electric power and plants, but some LED high bays, wall packs and area lights should be in order, too.

Institutional Projects
$18 billion to modernize the Veterans Affairs' hospitals and $10 billion to modernize federal buildings. These initiatives may be more related to digital infrastructure than they are to construction/retrofit opportunities.

Paying for it All
The other side of the coin relates to the funding of these projects. US-based lighting companies will see a bump in the corporate tax rate to 28% from 21% -- an increase that would be paced over many years. That might seem like a digestible 7% bump -- but the companies calculate this as a 33% increase in taxable dollars out the door. Increased taxes could be something that could negatively impact some companies' abilities to reinvest in their businesses.

 

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April 14, 2021

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