The bipartisan Infrastructure Investment and Jobs Act of 2021 (IIJA), the Inflation Reduction Act of 2022 (IRA), and the bipartisan Chips and Science Act of 2022 (CHIPS Act) are all major government spending initiatives that are having a significant impact on the U.S. economy and will for years to come.
Massive Investment Tied to the Legislation
The IIJA provides an additional $550 billion in new spending for a total of $1.2 trillion in infrastructure spending over the rest of the decade. The IRA has already resulted in over $242 billion in new investment announcements, with estimates suggesting as much as $1.2 trillion in clean energy spending through 2031, far above the law’s initial $400 billion estimate. As a result of the CHIPS Act, companies in the semiconductor ecosystem have announced dozens of new projects across America—totaling nearly $450 billion in private investments—since the CHIPS Act was introduced.
These multi-trillion dollars of spending are not only having a major impact on the obvious industries, including semiconductors, construction, and utilities, but will ultimately have a significant influence across all industries in the economy.
The Infrastructure Investment and Jobs Act of 2021 (IIJA)
The infrastructure law authorized $1.2 trillion for transportation and infrastructure spending, with $550 billion in new federal spending on top of previously approved funds. The bill is an ambitious plan to upgrade and modernize the nation’s roads, bridges, water systems, broadband access,and electric grid. The work started in 2022 and will last through the rest of the decade. The law calls for investing $110 billion for roads and bridges, $66 billion for rail, $65 billion for power grid infrastructure, $65 billion for broadband, $63 billion for water and wastewater infrastructure, $47 billion for cyber and climate resilience, $39 billion for public transit, $25 billion for airports, $24 billion for environmental remediation, $19 billion for ports and waterways, $16 billion for electric vehicle infrastructure and electric mass transit, and $11 billion for road safety.
Now, in year three of spending, the law has allocated over $300 billion to state funding and direct investment projects, with about 80% of all competitive funding still left to be awarded.
This traditional infrastructure investment is beneficial for industrial and materials companies. Utilities benefit from increased investment in water and energy infrastructure. Many communication services and technology firms are beneficiaries of increased investment in broadband.
