Pittsburgh — A robust federal infrastructure investment package would not only help to support steel demand as the US recovers from the coronavirus pandemic, it will help to support the country more broadly as it adjusts to a "new normal" in the wake of the virus, Steel Manufacturers Association President Philip Bell said in an interview with S&P Global Platts this week.
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"When we look at what can be done to support 21st century steelmakers, I think probably one of the most important things we can do it get a comprehensive, well-funded infrastructure investment program in place as part of the COVID-19 relief efforts," Bell said. "The thing about infrastructure is that it's not a bail out, infrastructure creates jobs. In fact, these would be American people, doing American jobs, to help other Americans."
Bell pointed to a recent report from the Boston Consulting Group which found that for each $1 trillion invested into infrastructure, it has the potential to create over 3 million jobs in the span of five years.
More than 33 million Americans have filed for unemployment in the past seven weeks amid the coronavirus crisis, according to the latest figures from the US Labor Department.
"If we look at infrastructure as a way of not bailing people out short term, but creating jobs and jobs that pay well and generate taxes to offset the cost of the investment, I think we will be in much better shape," Bell said.
Bell noted that bridges, roadways and waterways in the US are in desperate need of upgrading. In its most recent infrastructure report card issued in 2017, the American Society of Civil Engineers issued a D+ grade for US infrastructure, on par with results in 2013, the last time ASCE issued its assessment. The report, which is updated every four years, provides a review of the nation's 16 major infrastructure categories and rates each based on investment, capacity and the need for projects to be completed.
However, a robust infrastructure package would allow for investment beyond the US transportation network.
"Keep in mind in order to fight the COVID epidemic, we are going to have to look at things like new hospitals, things like jobs, as states start to open up," Bell said. "Where do people go to work if the businesses they used to work at are closed? We've got to create that political will."
The SMA is cautiously optimistic that infrastructure will be a part of the US recovery plan and continues to advocate for its inclusion, Bell said.
"Right now I'm not going to handicap it, but I think if you're in the steel industry, you naturally have to be an optimist. I think we need to get both sides at the table and understand how this could be a way of stimulating the economy without just giving away free money," Bell said.
President Donald Trump previously stated he would like to see infrastructure spending taken up in Congress, however Republican lawmakers have been cautious about spending money.
"Infrastructure is the backbone for commercial activities, transporting of goods and other types of manufacturing and production, so you would think there would be the political will there to do it, but that remains to be seen," Bell said. "...I think what we have to try to understand is if we invest in infrastructure it's going to help us deal with this new normal that we're facing."
Should the federal government not support infrastructure as part of its broader recovery plan, there may be a need to tailor some steel-specific packages if they are not willing to invest in infrastructure in a meaningful way, Bell said.
"The steel industry is an essential part of building and creating this new normal," Bell said. "It's an essential part of bringing our economy back, it's an essential part of keeping our national strong, and I think that's critical to understand, not only in DC, but around the country."