America’s infrastructure is super old.
In a note to clients over the weekend, Goldman Sachs economist Alec Phillips takes a look at the state of American infrastructure and the prospects for increasing investment to improve it, and what he finds isn’t pretty.
“The quality of infrastructure is generally regarded as a weak point for the US,” Phillips writes. “Ageing airports, rusting bridges, and crumbling roads generate complaints from visitors and residents alike.”
Bridges in particular pose a problem around the country. Phillips writes that of the roughly 600,000 bridges in the US, 25% are classified by the Department of Transportation as “structurally deficient” or “functionally obsolete.”
Phillips writes that the “theoretical design life of a bridge is about 50 years,” which makes this a particularly damning chart.
The average ages of all types of infrastructure have gotten steadily older over the last few decades.
Additionally, Phillips notes, “This year, Congress is expected to enact long-term spending plans for capital investment in highways, transit and aviation infrastructure. The outlook is more
uncertain than usual, with depleted funding sources threatening to hold investment back, while lower energy prices and/or the possibility of corporate tax changes could present at least an opening for a boost in resources for the first time in two decades.”
So, things don’t appear to be getting better. At least not right now.
The upshot of Phillips’ analysis is that while the politics of increasing government spending on infrastructure pose challenges, a policy change could provide a boost to US growth both in the short and long term.
However, we probably shouldn’t hold our breath.
“While core infrastructure in the US could clearly use improvements, our expectation is that they will occur only slowly,” Phillips writes.
“Eventually, federal reform is inevitable but it is far from clear that it will come about as part of this year’s debate on infrastructure financing.”