Mid-market execs say it's time for US infrastructure improvements

15 June 2021 Consulting.us 3 min. read

Middle market executives agree that aging US infrastructure is hampering economic growth, according to a recent special report from RSM US and the US Chamber of Commerce. The survey polled 700 middle market executives in April 2021.

Sixty-three percent of execs said the country’s crumbling infrastructure is restricting growth of the national economy, while 60% said it is hurting their local economies and 54% said it is hurting their own businesses.

Most respondents, however, believe improvements are coming, with 64% expecting meaningful action in the next three years.

"Executives are telling RSM that there is an urgent need to shore up what makes the American economy tick," said Joe Brusuelas, chief economist of RSM US. "The results of this survey send a clear message to lawmakers and policymakers that middle market businesses are ready to invest and want to participate in the rebuilding of America's infrastructure.”Level of agreement on current state of US infrastructureWhen RSM asked about 21 categories of infrastructure upgrades, in every case at least 63% of executives said an improvement would benefit their day-to-day operations. The most favored upgrades were telecom network security, local roads and highways, telecom networks, interstate highways, and national energy grid. The least favored upgrades were national passenger railway systems, piers for commercial and recreational use, and bike lanes.

"Rebuilding our nation's infrastructure is not only one of the fastest and most direct ways to create new jobs and spur economic growth now, but also it will sustain our modern economy and improve the quality of life for every American. Infrastructure is not a partisan issue—there is strong bipartisan support to invest in our nation's future and we now need our elected leaders to come together and show the American people they can enact fundamental, good policy."

It is a partisan issue, however. President Joe Biden’s infrastructure plan talks with Republican Sen. Shelley Moore Capito collapsed earlier this year. Republicans are reticent to reverse their 2017 tax cuts to help pay for America’s much-needed infrastructure improvements. Biden and the Democrats have been calling for a corporate tax rate increase to at least 25% from the current 21% to help offset costs.Likelihood to participate in vendor selection processNow there is a kneecapped bipartisan senate proposal that aims for $1.25 trillion in upgrades, down from Biden’s $2.3-trillion initial plan. The proposal says it won’t hike taxes, but otherwise does not outline how it will pay for investments.

It’s unclear whether the package will be comprehensive enough to gain approval from the White House and Congressional Democratic leaders.

The RSM survey didn’t ask mid-market leaders whether they would be willing to pay a higher corporate tax rate to realize effective infrastructure improvements.

Mid-market businesses are, however, eager to directly profit from infrastructure spending. Fifty-one percent said they are likely to participate in the vendor selection process for businesses, up from 30% in 2017. Of those in the infrastructure sector, 80% expressed interest in bidding, up from 59% in 2017.