The Trump Effect on Industrial Construction
The presidential election of November 2016 represents an historic change in the United States, producing a new President-elect, Donald J. Trump, who has proposed policies to “Make America Great Again.” Those policies include controlling immigration, renegotiating trade agreements, raising defense spending (of the U.S. and its allies), cutting personal and corporate tax rates, increasing energy independence, reducing regulation, and spending up to $1 Trillion to rebuild U.S. infrastructure. All or any combination of these, could potentially have a powerful impact on our future.
A review of the construction outlook for chemical plants, LNG terminals, gas plants, refineries, and transmission and distribution for oil and gas leads us to believe, despite abundant uncertainty, that the proposals of President-elect Trump improve the prospects for industrial construction almost across the board.
Regulatory changes will encourage the production of natural gas – encouraging investment in chemical plants, natural gas liquefaction facilities, refineries, and natural gas plants – even though increased capital costs, due to higher interest rates, will somewhat reduce those investments. The outlook for pipelines is better, since the Trump Administration will promote the Keystone North project and encourage the production and utilization of domestic oil and natural gas. Electric power generation will still likely be somewhat negative, since there remains significant uncertainty about the future of coal-fired power plants.
In short, President-elect Trump’s commitment to tap the very great hydrocarbon reserves of the United States suggests that the United States will be an attractive location for industrial construction – particularly for energy, chemicals and LNG – and prices will remain low despite rapid increases in consumption. The implications for the different types of industrial construction are detailed in the full document, which can be downloaded from the Construction Labor Market Analyzer® (CLMA) website.