Infrastructure Bill's possible effects on the Structural Engineering Industry 5

I think it's going to be very industry dependent. Do you design bridges and transportation structures? Stand by for 80 hour work weeks. Design buildings? Eh. For that it's a matter of looking at the spillover gains vs. the market response to a lot of construction in other sectors. Steel and concrete prices are likely surge as these projects start building. That could actually cool construction for those of us in the vertical sector. Then again, knowing that a section of town is about to be plugged in to high speed public transit, a better bridge, and fiber optic internet could cause localized development booms.

It is worth pointing out, too, that some of those projects will have pieces for building structural engineers. Transit centers have buildings, bus stops and train stations at least have shelters, wastewater needs structural engineers, etc. But it's a limited slice and usually goes to a handful of multi-service firms that offer package deals. Environmental firms with a structural department that can do a turnkey treatment plant design. Civil firms that will do traffic study and layouts...and have structural engineers that can provide building designs for auxiliary buildings.

1) Yes, I would have to think that this would create some manner of spike in demand that will translate into some manner of spike in compensation.

2) Outsourcing will tend to mute the effect of #1 if that is allowed to occur.

3) I'd expect the demand spike to hit public sector work first and then trickle down to private sector work.

phamENG said:

Do you design bridges and transportation structures? Stand by for 80 hour work weeks.

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If the bill generates a lot of work & with their already not being enough structural engineers available, I would think it would create even more of an employee market, which I would think it would be tough for employers to have employees work crazy hours (like 80 hr work weeks)

KootK said:

Outsourcing will tend to mute the effect of #1 if that is allowed to occur.

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Is it possible to outsource a lot of infrastructure work, that would require PE signed & sealed plans? I can see outsourcing work like Oil & Gas projects, but I would think it would be tough to outsource a good amount of domestic infrastructure projects.

From what I have been hearing, there isn't a lot of real "infrastructure" in this bill (relative to it's overall size).

oengineer said:

Is it possible to outsource a lot of infrastructure work

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Infrastructure is less prone to outsourcing, I think. Any trickle down to private sector building work is fair game though.

WARose - don't confuse this one with the social infrastructure bill they want to pass. The one that went through on Friday was actually very bipartisan (by the standards of 2021), and is focused on real infrastructure.

Will it create a demand? Sure. But here's the problem - we're not all created equal. This bill will have almost no direct impact on me. Structural engineers who are qualified to do the work that I do are probably not qualified to design bridges, and vice versa. So bridge engineers will be in high demand and civil engineers with transportation experience will be in high demand, but I'm neither of those. So it could increase compensation on that side, which may draw more graduates there, who will gain there qualifications about the time the funding from the bill runs out, leaving a glut of engineers in the bridge community and not enough (again) in the building community.

said:

The one that went through on Friday was actually very bipartisan (by the standards of 2021), and is focused on real infrastructure.

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neither bill is heavy on infrastructure, just a sales gimmick

note that the infrastructure part is only $550 billion (less than 30%) and the other $1.25 trillion goes to other things

The current bill breakdown includes:

$110 billion for roads, bridges, and highways.
$90 billion for public transit. $39.9 billion of that money will go to repair, modernize, and expand it as well as improving accessibility for the elderly and those with disabilities. It will also replace some transit vehicles with zero-emissions models. The rest will go toward existing programs.
$66 billion for rail infrastructure, which is meant to eliminate Amtrak’s repair backlog, especially in the Northeast.
$65 billion for the electrical grid. This will emphasize increasing the grid’s reliability, as well as increasing the green energy used in it.
$65 billion for broadband internet to increase access for rural, low-income, and tribal communities.
$55 billion for drinking water infrastructure to help replace lead pipes and eliminate chemicals called PFAs.
$50 billion for environmental resiliency and western water infrastructure. This includes measures to increase resilience against floods, drought, fire, and other disasters, as well as cyberattacks.
$25 billion for airports to help improve runways, gates, terminals, and older air traffic controllers.
$21 billion in environmental remediation, to clean up water and soil pollution.
$17 billion for ports.
$11 billion for transportation safety.
$7.5 billion for electric vehicle charging stations.
$5 billion for electric school buses, which is meant to drive demand for domestic EV manufacturers.
$1 billion to reconnect communities divided by transportation infrastructure, including design, demolition, and reconstruction of street grids, parks and other infrastructure.

I agree with WARose & cvg, everything I have read about it thus far has been mostly focused on "social infrastructure" not "real infrastructure". As others have said, those who design bridges may see some increase in work, but I suspect the vast majority of the money will be lost in government inefficiencies and will never make it to the engineers. Keep in mind that this also includes roads and highways, which means splitting with civil/transportation. I would be surprised if the bill has any real effect on structural engineers in the overall industry.

Forgot to add that the only way to increase salaries at this point is to move up in position or start charging more for projects. The profit margins are very low in engineering due to lots of competition and engineers not valuing themselves as they should. We won't see a change in salaries until we see a change in fees which we won't see until there are either less engineers and engineers are trying to get rid of projects or until engineers figure out that they are the reason for their lower salaries compared to other disciplines. The infrastructure bill will have little to no effect in my opinion on current salaries, but may cause more hours of working without just compensation for the engineer.

cvg said:

$55 billion for drinking water infrastructure to help replace lead pipes and eliminate chemicals called PFAs.
$50 billion for environmental resiliency and western water infrastructure. This includes measures to increase resilience against floods, drought, fire, and other disasters, as well as cyberattacks.

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I wish more was done for water & wastewater facilities.

Aesur said:

Forgot to add that the only way to increase salaries at this point is to move up in position or start charging more for projects. The profit margins are very low in engineering due to lots of competition and engineers not valuing themselves as they should. We won't see a change in salaries until we see a change in fees which we won't see until there are either less engineers and engineers are trying to get rid of projects or until engineers figure out that they are the reason for their lower salaries compared to other disciplines. The infrastructure bill will have little to no effect in my opinion on current salaries, but may cause more hours of working without just compensation for the engineer.

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My thought process is that since we are currently in an employee market (which is already making it hard for companies to find structural engineers in most sectors), then on top of that the gas prices are increasing (which typically helps spur the oil & gas industry to start building more refinery facilities, causing them to hire a ton of engineers), and now congress is going to spend billions to work on various infrastructure around the country - I would think that all of these things would make us more in demand?

Engineers make up less than 2% of the U.S. workforce, but we effect almost everything. It was mentioned in another thread that many structural engineers are leaving the field (either due to retiring or for a more lucrative field outside of structural engineering). With all this possible new coming work, would it be very beneficial to those who have remained in our structural engineering community (especially those who are licensed PE with at least 2 years of experience in structural engineering)?

I would think that it would be like "a rising tide lifting all boats" for structural engineers.

phamENG said:

This bill will have almost no direct impact on me. Structural engineers who are qualified to do the work that I do are probably not qualified to design bridges, and vice versa. So bridge engineers will be in high demand and civil engineers with transportation experience will be in high demand, but I'm neither of those. So it could increase compensation on that side, which may draw more graduates there,

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Would the topics I mentioned in bold effect you in an Indirect way? If so many engineers are now recruited to either Bridges/Transportation/Infrastructure or the Oil & Gas Industry, would clients have a hard time finding structural engineers to design their buildings? If this was to happen, would that not make structural engineers who design buildings just as sought after? Whether it allows them to charge a lot more, I am not sure (one would hope lol).

You cut off the last part of my statement, which is material to your question.

It seems like your applying broad economic principals to a specific corner of the broader market and, in doing so, you're missing some important nuances. In general I think your ideas make sense, but they're not as easy to apply to structural engineering specifically. If we were workers on an assembly line who can be trained to do a passable job inside of a couple of weeks and probably make a decent wage (for the work), you'd be spot on.

For engineers, the time span to go from "hey, that field is paying well" to "hey, I'm making a decent living at this" is more like 8-10 years. Will there be indirect benefits? Maybe. Some in the heavy civil/transportation sector may get desperate enough to start training building PEs to do the work and pay them enough to convince them to "start over", but that's going to be a very tough sell. We're not all interchangeable cogs in a machine - we have our unique roles that make it difficult to switch back and forth. So a sudden spike in demand for bridge engineers, transportation engineers, or oil and gas engineers would probably take several years to show up in any sort of analytics.

Another important consideration is the unique nature of economies of scale in consulting engineering - and more importantly the diseconomies of scale. There is a sweet spot for every company - dictated by myriad and ever changing variables - between the two. You want to be big enough to handle the right size and quantity of projects to maximize profits, but no bigger as you start incurring more overhead and expenses than you can make up for by increases in revenue. So even though being on the wrong side of that sweet spot can look better because revenues continue to rise, profit margins actually shrink and your overall return on investment falls until the folks at the top are not receiving any additional compensation for growing managerial responsibilities and risk assumption. So smart engineering business leaders in this market shouldn't necessarily be expanding - they should be increasing their fees to increase margins and employee compensation. If they are still below their sweet spot for economies of scale, then expansion and hiring may be a good idea, but it's not always the answer.

cvg - where are you getting your summary? The breakdown agrees with what I'm finding, but the totals don't. The infrastructure bill that passed Friday was only $1.2T total. The $550B(+/-) listed above is the new infrastructure spending and accounts for about 46% of the total 'claimed' investment. The rest is still infrastructure, but it's spending that's already been approved and just got shifted around and lumped in with this to improve the optics, as all politicians are wont to do.

The social 'infrastructure' bill is still out there and the last I heard was down to around $1.75T (which comes close to the total you're showing), but is unlikely to go anywhere.

(By the way - this isn't meant to provoke an argument - there are so many websites out there listing so many different things with so many different titles from all sorts of dates through the negotiation process, it can be hard to figure out what you're looking at. If you have better information than I've found, I'd like to see it.)

here is the site I referenced. they keep changing things in each version of the bill and apparently the total amount has changed. however it isn't very clear what the bottom line is. the fact remains that the bill is only maybe half "infrastructure" and unclear what the other half is.

I suppose some people are also debating what "infrastructure" means. Taken as narrowly as possible (roads, bridges, rails), that represents a small portion.

The dictionary definition of infrastructure is:

[URL unfurl="true" said:

www.dictionary.com;[/URL] infrastructure:]1. the basic, underlying framework or features of a system or organiation.
2. the fundametnal facilities and systems serving a country, city, or area, as transportation and communication systems, power plants, and schools.
3. the military installations of a country.

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By that definition, I'd say most of it falls under the infrastructure category or, in a couple of cases, are infrastructure related. Some of the environmental remediation efforts are a bit dubious under the heading, of course. Though the real language could tie them to environmental impacts of infrastructure - I'm not sure.

It will create work but not some big demand and therefore increase in pay. These projects have such a long lead-time that the industry will be able to accommodate the increase in demand.

the funding is over 10 years. so perhaps $50 billion per year give or take. the impact on structural engineering might be minimal depending on how they prioritize it

Aesur said:

but I suspect the vast majority of the money will be lost in government inefficiencies and will never make it to the engineers.

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True story! Our firm was part of a project where 50 million dollars of federal funding was pulled from the table after 10 years because State officials didn't obligate the funds by the deadline. The money that was reserved for a bridge replacement project just flew away back into the pocket of Uncle Sam.

I may be oversimplifying this but....

$110 billion for roads, bridges, and highways. I would assume this money will need to cover everything from re-paving, to road widenings, to new roads and bridges, to bridge rehabilitations. Replacement of utilities located within the State Right of Way will be lumped in with this.

If you allocate the money based on population (I know that's not how it's actually done) then the State I work in will see $475 million of that budget. Assuming an 80/20 Federal to State funding split, the $475 million will actually be more like $600 million of a State spending construction budget. The public cares more about smooth/pothole free roads than anything so the majority of that money will go to civil road design. I would be surprised if even 25% of that budget went to bridges and culverts. Assuming so, then that means $150 million will be allocated for the structural portion of transportation construction. The average 150ft long x 75ft wide concrete girder bridge will cost approximately $12 million in my state. That's 13 new bridge designs. That spending over 5 years, you may see a few firms hiring one or two more people. If that spending is over 10 years... one firm could absorb all that work and maybe get away with hiring only one more junior level engineer.

I'm happy to have the additional federal money but I don't have any grand illusions that this is going to be a large boost to the Structural Engineering community.

@STrctPono - well said. Now add in inflation and that $12 million dollar bridge is really $24 million so you get half the bridges which means many firms wouldn't even need to hire one engineer as the majority of that money is for construction, not design. Please note that I design buildings and rarely deal with AASHTO or bridges, so I'm not as familiar with the fee's for bridges, but have heard they are slightly higher than vertical construction fees.

@phamENG - I completely agree with you. Once you find that "sweet spot" don't change, it's hard to get back there.

@oengineer - Currently (per the latest stats I read) construction spending in the US is $1.5 trillion/year. Conservatively take the $550 billion going to "infrastructure" that we (engineers) are involved with, conservatively assume 0.75% engineering fees and you have $4.125 billion engineering fees. The spending will be over a span of 10 years (last I read), which means $412.5 million a year in engineering fees. Assuming the same 0.75% engineering fees in the $1.5 trillion/year spending we have $11.25 billion engineering spending a year. This is an estimated 3.67% increase in engineering per year over 10 years, I would think the industry could fairly easily absorb that increase without any changes. In reality the % of fee for engineers is probably closer to or lower than 0.5% of construction cost, however it would result in the same percentage increase in fees. FYI - inflation is currently greater than 8%... so we are actually doing worse with this spending bill...