Like many presidents before him, Donald Trump campaigned on several issues he plans to address during his tenure in the Oval Office. One that stuck out was the need for improved infrastructure.
“We will build new roads, and highways, and bridges, and airports, and tunnels, and railways all across our wonderful nation,” he told the audience during his inaugural address.
Given these promises, it seems that the construction industry could thrive under a Trump administration. But statements made during speeches are hardly guarantees. And while Trump might hope to bolster the construction industry, there are many factors at play that could affect construction companies and workers in the years to come.
The $1T infrastructure plan
During his campaign, Trump boasted about a $1 trillion infrastructure plan that would address needed upgrades to airports, hospitals, bridges and more. U.S. News & World Report noted that, despite his repetition of such a plan, Trump offered few details about how it would be carried out.
Democratic leaders decided to write up a proposal that would include more details and directions on how to make the plan happen. The plan would be carried out over the course of 10 years and create an estimated 15 million jobs.
While job creation and funding for infrastructure projects across the nation would certainly benefit the construction industry, the plan needs to be accepted by Trump and passed by the Senate. Though Democrats largely support the plan, and key elements sound similar to Trump’s hopes for infrastructure, Republicans are quick to point out that $1 trillion could be seen as a high price tag for a country that’s already $20 trillion in debt.
Labor shortage and immigration
One of the biggest challenges the construction industry has been dealing with is a shortage of skilled laborers. After the housing crash, many homebuilders left the industry, looking for work elsewhere. Most haven’t returned, Curbed reported. About 200,000 jobs are currently unfilled, putting greater stress on business owners.
Curbed spoke to Randy Strauss, the owner of Strauss Construction in Ohio. He pointed out that many of the employees he sees are nearing the end of their careers, with few younger employees ready to take over. As more workers age out of the job market, positions may be more challenging to fill.
In addition to an aging labor force, the construction industry is one that is heavily supported by immigrant workers. Trump’s plans to take a harder stance on immigration could have a negative impact on current or prospective construction workers.
“He’s going to have to hire immigrant workers to build it, because I don’t know who else is there to build it,” Strauss noted. “You get into the Texas markets, near the Mexican border, and that’s who’s doing all the work down there.”
Given the shortage of skilled laborers already plaguing the industry, some expect that homebuilding efforts will have to compete with infrastructure projects for workers. If Trump follows through on his claims to put infrastructure on the top of his list of priorities, homebuilders may choose to find jobs in that market, effectively leaving homebuilding behind.
It’s no secret that Trump dislikes regulations. He tends to view them as hindrances rather than policies put in place to benefit communities and people. One of his first moves was to sign an executive order to reduce regulations with a simple rule: For every regulation passed, two would be revoked, CNBC reported.
During his campaign, Trump spoke to the National Association of Home Builders about the impact regulations have on efforts to build affordable housing, Construction Dive reported.
“I know what you’re going through … You’re being driven wild with regulation,” Trump said, according to Construction Dive. “I think we should get that (regulatory cost) down to 2 percent.”
Currently, the regulatory costs comprise close to one-fourth of the price of a new home, according to an analysis by the NAHB. These regulations address a wide range of aspects of construction, including:
- Home safety, such as carbon monoxide detectors and fire sprinklers.
- Construction worker safety.
- Building permits.
- Tariffs on materials.
Should Trump succeed in reducing the impact of regulations on home construction, building costs could decrease. Homes that are less expensive to build could help boost home construction efforts. However, it’s unclear which regulations will be nixed, when, and how big an impact it’ll have on the construction industry.
Taking on the financial industry
Trump also wants to lift the amount of control the government has over Americans’ financial matters.
NerdWallet pointed out he wants to reduce the impact of the Dodd–Frank Wall Street Reform and Consumer Protection Act, passed in 2010 by President Obama to address the financial concerns many people had during the Great Recession.
Dodd-Frank created the Consumer Financial Protection Bureau, an organization that aims to protect consumers from malpractice in the financial sector.
“If Dodd-Frank is streamlined, I think you could have banks be more responsibly aggressive in the marketplace, as far as making mortgages,” Jeff Taylor, managing partner of mortgage processing company, Digital Risk, told NerdWallet. “And I think that will open up more product for first-time homebuyers … in the next couple of years.”
Opponents of dialing back the CFPB’s influence say it puts borrowers at risk to be mistreated by lenders, a major cause of the Great Recession that the country is only just now recovering from.
However, fewer regulations enforced by Dodd-Frank and the CFPB could also make getting a loan much easier – something business owners, homebuyers and many other consumers may appreciate.
At this early stage in his presidency, it’s not certain how different industries will fare under a Trump administration. The construction industry might thrive, or it might find more hardships in the months and years to come.