Funding in the New Normal Panel Says Pandemic Uncertainty Will Slow Economic Recovery

ACEC News / Market Forecast

July 17, 2020

Funding in the New Normal Panel Says Pandemic Uncertainty Will Slow Economic Recovery

In the ACEC Research Institute’s Funding in the New Normal roundtable on Thursday, the panel of economic experts said that even after a COVID-19 vaccine is found, engineering markets will take many years to recover from the pandemic’s impact.

The roundtable was the third, and final, event in the Institute’s Future of Engineering series. The first two roundtables addressed the Impact of Technology and the Buildings We Live and Work In.

Panelists included Rosemarie Andolino, former Chairman of MAG USA and CEO of International Development, Manchester Airport Group in the UK; Anirban Basu, chairman and CEO of Sage Policy Group an economic and policy consulting firm; Jeff Davis, senior fellow with the Eno Center for Transportation and is also the editor of the Eno Transportation Weekly; and David Zipper, a visiting fellow at the Harvard Kennedy School’s Taubman Center for State and Local Government. Joseph Bates of the ACEC Research Institute moderated the panel, which had a virtual audience of more than 160 people.

The panelists acknowledged that the recent pandemic surge in the U.S. has added greater uncertainty in projecting federal, state and local finances and future project funding.

“It’s really a risky moment in our economic history,” said Basu, “and that uncertainty will likely continue through the end of the year. We have shattered government finances, state, and local. Empty storefronts, shuttered restaurants, vacated office suites. We have a commercial real estate sector that is in deep recession and will take years to recover.”

Zipper added the lack of clarity at the federal level filters down. “It forces transit agencies to become very concerned or cities to become very concerned about future cash support, which leads them to make decisions now about future planning.”

Similarly, Davis noted that while the federal side of spending for projects hasn’t yet been affected, “there is also uncertainty in the ability of many state and local governments’ to produce matching funds.”

Panelists agreed that once a vaccine is discovered, another major infusion of federal stimulus funding will be needed to boost post-pandemic recoveries in various markets.

“There must be an infusion of federal dollars,” Zipper said, and added, “It’s going to take a long time for office construction and urban transportation to recover.”

Andolino said a similarly slow recovery is expected for the airline industry. “It’s going to be awhile. Everybody is in a cost-containment mode now. We still need to see what the new demands will be, what will be key to making passengers feel more comfortable, what will be key to getting business travelers back?”

Click here to view Funding in the New Normal roundtable.

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