Cities and states facing elevated construction costs face an unappetizing menu of choices ranging from more borrowing to delaying projects, each of which carry their own set of credit risks. Elevated construction costs also mean fewer bids for public projects, as contractors are likely to opt first for the private sector, particularly when the market is strong, as it has been for the last two years. High material prices, a tight labor market, fewer bids: it all threatens to eat into the purchasing power of $100 billion of new annual federal infrastructure funding that will roll out over the next five years under the Infrastructure Investment and Jobs Act.
Source: The Bond Buyer
