Events to Watch for 2017: US Infrastructure Boom (Part 3)

In the recently released report, FSG’s Events to Watch for 2017, we profiled what our analysts believe are the downside and upside scenarios that multinational companies should evaluate to ensure that strategic plans are resilient when the unexpected occurs. As a follow-up to our previous blogposts profiling a few of our chosen events, one upside scenario multinationals should be closely tracking is our US Infrastructure Boom scenario, where the Trump administration and Congress agree to a massive infrastructure program that helps reduce the infrastructure gap over the next few years, and boost economic growth in the US and in its trading partners.

Trump's infrastructure plan

Impact on the business environment would be largely positive, but may drive up interest rates

  • Increased investor optimism – Accelerating investment in the US economy would jumpstart global growth beyond the sub-3% level of the past few years
  • US demand boosts trade partners– A boost to US economic growth from infrastructure spending would increase demand for imported construction equipment, manufactured goods, steel, concrete, and commodity inputs
  • Higher interest rates – With the economy near full employment, an infrastructure boost would increase inflation, requiring the US Federal Reserve to raise rates more quickly

Incorporate workforce planning into strategic planning

FSG believes this downside scenario has a 35% likelihood in 2017, and we believe multinationals need to begin prioritizing markets that benefit from government investment in US infrastructure, e.g., directly from sales to the US government, contractors, and foreign firms that export to the US. The likelihood of this event will become clearer once this year’s legislative agenda is set over the coming weeks.

In the report, we provide in-depth scenarios, expected impact on business performance and operations, as well as recommended frameworks for contingency planning and effective market monitoring.


For existing Frontier Strategy Group clients, you can download a copy of the full report here. Not a current client? You can purchase a copy on FSG’s online store here.

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