Bridge Out?

Is our infrastructure crumbling?

Every four years, the American Society of Civil Engineers issues a report card on US bridges and roads. And, predictably, it calls for massive investment to bring them up to standards—most recently estimating that $3.6 trillion needs to be spent by 2020. Is Brooklyn Bridge falling down?

With all due respect, asking civil engineers whether we spend enough on infrastructure is like asking teachers how much to spend on schools. The answer is always more. Where you stand often depends on where you sit.

Certainly, bridges, roads, and other public facilities like water mains and river channels need regular maintenance, but it’s too easy to list the latest bad news and call it a systemic problem. What matters is how much we spend, and if things are getting worse.

When we compare our spending to other countries, the US looks pretty average. Over the ten years from 2001 to 2011, we spent about 3.3% of GDP on infrastructure. The average developed country spends 3%. And believe it or not, statistics show that in aggregate our roads are improving.

Which doesn’t mean we should slack off; eternal vigilant resurfacing is the price of a smooth ride. But don’t panic: the bridges—and the sky—are not falling.

Douglas R. Tengdin, CFA

Chief Investment Officer

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