Business Trends

 

02 13 2017

Trump's Impact on Construction Businesses

02 13 2017

How Will the Trump Administration Impact Construction?

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.

Regulation cuts

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.

Find Out How Much Funding You Qualify For

Fields marked with an * are required
By clicking this button I agree to all terms and conditions.

Terms & Conditions

General Acceptance

Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

US Patriot Act:

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan. What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number. We will also ask for your name, address, date of birth, and other information that will allow us to identify you. We may also ask to see your driver’s license or other identifying documents.

 

For Loan/Merchant Services:

The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.

 

For Equipment Services:

I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, text-messages, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

 

Text Messaging:

By providing my wireless phone number to National Funding, Inc., I agree and acknowledge that National Funding, Inc. may send text and multimedia messages to my wireless phone number for any purpose. I agree that these text or multimedia messages may be regarding the products and/or services that I have previously purchased and products and/or services that National Funding, Inc. may market to me. I acknowledge that this consent may be removed at my request but that until such consent is revoked, I may receive text or multimedia messages from National Funding, Inc to my wireless phone number.

  
The Federal Equal Credit Opportunity Act prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status or age (provided the applicant has the capacity to enter into the binding contract); because all or part of the applicant’s income derives from any public assistance program; or because the applicant has in good faith exercised any right under the Consumer Credit Protection Act. If for any reason your application for business credit is denied, you have the right to a written statement of the specific reasons for the denial. To obtain the statement, please write to National Funding Inc., 9820 Towne Centre Drive, San Diego, California 92121. Funding amount and credit approval is subject to a full credit profile review.