Follow the MoneyThe trend for infrastructure spending in the US has been on a steady downward path. The chart below illustrates U.S. public spending as a percentage of Gross Domestic Product during the past 12 years.
After a brief increase in 2008 through 2009, spending on infrastructure has dropped to its lowest point in 10 years. As illustrated by the chart at bottom, left, spending on roads and highways has followed a similar trend.
Historically, state and local governments have provided most of the funds for the majority of the infrastructure projects. Since 2008, however, the recession and the slow economic recovery led to reduced infrastructure funding as governments struggled to balance their budgets. Congress filled much of the gap in the form of stimulus money, as evidenced by the increase in 2008, but that money was quickly exhausted.
The current outlook isn’t a pretty one. The American Society of Civil Engineers (ASCE) estimates that the total investment needed for infrastructure by 2020 is $3.6 trillion. Let’s take a closer look at where those funds are most needed.
Breaking Down the BreakdownThe ASCE has evaluated the condition of America’s aging infrastructure and has assigned grades to separate categories. The lowest rated categories clearly show the need for additional funds and where those funds are needed the most.
__________________________________________________________________________XL Group’s enewsletter, Construction Insider, is provided for information only and does not constitute legal advice. For legal advice, seek the services of a competent attorney. Any descriptions of insurance provisions are general overviews only.XL Group is the global brand used by XL Group Ltd’s insurance subsidiaries. In the US, the insurance companies of XL Group Ltd are: Greenwich Insurance Company, Indian Harbor Insurance Company, XL Insurance America, Inc., XL Insurance Company of New York, Inc., and XL Specialty Insurance Company. Not all of the insurers do business in all jurisdictions nor is coverage available in all jurisdictions.
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Shannon Lawless, CRIS and Bob Storey, Risk Engineers, North America Construction team
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