2023 Q1 | Everywhere at once

It's hard to reconcile a 1/4 of 2023 is already behind us. It feels like we are barely hitting our stride in 2023, and yet we have already seen so much activity across the infrastructure and government funding landscape.

Here are some of the trends I've seen so far in 2023:

Procurement departments are struggling to keep up with the demand

Procurement departments across all levels of government saw a significant change occur through the pandemic and the resultant slow in procurement activity. The labor market's shift away from office-based roles has exacerbated the availability of procurement talent, further impacting the ability to meet internal demand for procurement support. These constraints regulate the speed that capital projects can be developed in response to key funding packages like ARPA and IIJA.

My take: more departments will require staff augmentation or outsourcing support to meet leadership and market expectations fueled by the infrastructure funding halo.

What's shovel-ready isn't necessarily shovel-worthy

Our industry's pipeline development has long been slow to respond to dynamic shifts created by economic, social or political change. Capital Improvement Programs (CIPs) are not necessarily built to enable acceleration when new funding at the scale of IIJA is released. In fact, most CIPs are long-term wishlists used to appease stakeholders. This approach has melded with the cadence of our industry because (as noted above) procurements take time. From the first consultant to the close out of a project, time and resource limitations have long been the main filter to weed out CIP wastage.

My take: there is a risk in this funding renaissance that poorly conceived projects are given a lifeline - when they actually deserve a DNR. Our industry must continue to challenge public agencies to be clear on defining a robust business case, operational impact and mission alignment for every project to avoid squandering this generational opportunity to repair US infra.

Labor trends are turning (in infrastructure-focused firms)

Wage pressure in 2022 was acute, along with the personal impact of inflation on rents, at the grocery store and at the car dealership.?At the same time, we've seen record mass layoffs in the tech sector.?However, wage pressure is showing signs of tapering off as offer acceptance rates increase and the need for additional incentives such as sign-on bonuses reduce.

The construction and infrastructure markets are starting to appeal to candidates seeking a more stable career path to grow skills and maintain economic and social mobility.

My take: most candidates are looking for back-to-basics - cash in pocket and career progression opportunities. Flexibility and PTO benefits remain high on candidate agendas but frou frou benefits are being met with cynicism.

What's the score for Q2 and beyond:

• Record big project announcements
• More procurement delays to major RFPs
• Tapering of wage inflation
• Continued stress within the public sector around labor shortages, working conditions (hybrid/remote)
• Political pressure to show 'benefits realization' from the big bills (IIJA, ARPA, IRA)

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