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Uncovering Massive $1.9 Trillion US Construction Boom: Epic Projects & Exciting Opportunities!
75 Plays4 months ago
On this week's episode, Jason and Carlos don their cowboy hats (and shaky accents) as they venture into the American construction landscape.
The two shed light on the sheer scale of America's industry, some of the more remarkable schemes being delivered, and which projects they'd choose to be a part of.
Follow Carlos on Linkedin | Follow Jason on Linkedin | Check out Aphex
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Transcript
A Night of Accents and Altercations
00:00:00
Speaker
There's this one story I'll tell you at one point in the future. I'll tell you this one time we're out at a ah nightclub. It was in ah a part of Australia and it was like part of a shtick back in the day. So I used to follow American football and I had a lot of ah team ah clothing. And one night I put on this American accent for an entire night. And on the walk home, we got like accosted by some local people, and it ended up in a fistfight. And the whole time on an American accent, and then the police got called and the police arrived. ah They started interviewing everyone about like the altercation, because yeah, we got into like quite a You know, long story short, they asked me some questions, and I'm still, because there's like, there's some, there's some girls and stuff involved, I'm still in the American accent.
00:00:49
Speaker
I'm still in the American accent getting asked by the police where I came from. And I'm saying, yeah, I've just, I'm on exchange from North Carolina, blah, bla blah, blah, blah. And they're like, cool. Do you have any identification on you? i Yeah. So then I pull out this Australian driver's license. Like, oh, okay. How long have you been here for? And then I'm like, how long? Years. Uh, and then I can't tell, I don't, I don't really recall whether they then took pity on me and just started like playing along with it or whether I got away with it, but I didn't break character. Um, Amazing. Yeah. Oh, It reminds me of a super bad, like loving in his idea. Yeah. Yeah. In my head, it was way cooler than that, but that's kind of, for that's probably what it was closer to.
Podcast Introduction: Construction & Tech with Jason and Carlos
00:01:41
Speaker
You're listening to the Offside Podcast with Jason and Carlos, where we talk all things construction and technology. Join us for discussions with industry leaders and insights into latest trends in construction.
00:01:56
Speaker
Welcome back to the Offside Podcast.
00:02:02
Speaker
oh yeah That was more like an American pretending to have an English accent than the other way around.
00:02:14
Speaker
Shit. I gotta regret that. Right. In a recent episode, we covered a topic which is going through a bit of a shift in infrastructure spent from transportation to renewables, kind of focused on Europe and Australia, and also a bit of a sort of a massive investment in the private sector in areas like data centers. So on that theme, there's obviously an enormous amount of spend over in the US, something that we didn't cover within that episode. um So we thought that might be worth digging into a little bit, um because I know when I was about to say, I remember when I was on the tools, I wasn't on the tools, but I was in construction. We we know you in sales you know you've been in sales too long when you can just seamlessly ah transition into a lie about some story that you
00:03:02
Speaker
I did exactly that in the past. You should buy this thing. This is too niche for you, but that just reminded me of Kia Starva, which makes me die inside. But anyway, yeah back at a when I was on projects, for sure, we didn't really have any knowledge of the megaprojects happening in America. Like you see the odd piece of content on the B1 ML or something. But yeah, I think it's quite an interesting space to drop into and to give a bit of context around so the size of the industry over there. And we'd love some awesome facts that we still don't like. One of us definitely does. Yeah. Yeah.
US Infrastructure: Renewables Shift and Political Impacts
00:03:38
Speaker
So um the construction market's about 1.5 trillion over there a year. So obviously substantial. um What number do you have? 1.5 trillion?
00:03:49
Speaker
I got 1.9 in my research. Yeah, 1.9. Maybe I had like different sources. Last year's and yours is this year. Yeah, maybe. anyway I was 23, 1.9. Yeah, 1.5 to 1.9 trillion a year. um Give about 400 billion. in Yeah. About 400 billion seems to be infrastructure um and a hundred billion of that alone on transportation. One of the craziest that was the 65 billion. Yeah, they're spending half an HS2 on broadband internet alone. That's crazy. 65 billion on broadband.
00:04:29
Speaker
Given what it takes to get you to dial into a podcast, I think the UK could do with a half a HS2 on some broadband. Yeah, we do. We do for sure. But it makes you wonder about things like Starlink and whether it's worth putting in 65 billion of broadband internet. But anyway, obviously mega stuff. Another crazy stat. That's like Australia spending $60,000 per head on construction. Another useless but interesting factor. Is that a lot? So it feels like a lot.
00:05:00
Speaker
That is a lot of money, yeah. With Trump coming in, big claim there, with Trump potentially probably coming in, it's likely these numbers will actually increase. He's quite an advocate for... I heard one project in particular, a big fence. Yeah, I forgot about that one. There's a big fence, there's
How Does US Construction Stack Up Globally?
00:05:19
Speaker
a big signage job, they've got to go and put new signs up on the buildings to say Trump, and then there's a big factory making red hats. Yeah. ah Yeah. Someone actually sent a picture to us wearing an Aphex t-shirt and a Make America Great Again hat at the same time. We were looking for something to put on the website. So that would be, if we could, if we've got that handy, that would be great.
00:05:41
Speaker
o Yeah, he probably would be up for that. So anyway, um huge amount of money being spent across the board. Obviously, we have the natural concentration of spending projects across things like California, New York, Texas, sort of hubs. It's a pretty large, notable projects in there. So um not small. Not small indeed. when in in my here's Here's a few of my own stats right back at you. um i was like All the numbers are so big, even if you try and measure it. like If you measure it in dollars, it's lots of cabbage. um And if you try to measure it in like another unit like HS2s, it's still like a lot of HS2s. And so I started thinking about, okay, what is
00:06:20
Speaker
you know, how big is it really in like relation to other parts of the world? And that really like blew my mind. So yeah, even if we take the 1.5 or the 1.9 trillion, that is 10 times the size of the Australian market, which is about 160 billion. And it's about five times the size of the UK. uh in terms of spend which I think we're showing it like 300 billion even that number seems suspect to me in terms of size I don't know if you had a UK market size in the three mid 300s for both France and the UK
00:06:56
Speaker
Yeah, an all in
The Competitive Landscape of US Construction
00:06:58
Speaker
the UK market size, but I would believe that more. But yeah, so that's like that's somewhere close to like, yeah, te is that in pounds, by the way, dollars? Yeah, so that's like 10 times the size of the UK is what's crazy is if you look at that in relation to other parts of the world, global ah construction spends like 15 trillion. I won't even try and translate that just to use. That's a lot. Um, which puts it at like us at like 12% roughly. Yeah. You get like France, UK 2% or something each China. And I've looked this up like five different ways was like 4.8 or 4.7 trillion, which is 30% of all infrastructure.
00:07:45
Speaker
wow yeah i knew that they did a lot of stuff but i that blew my mind at how massive the infrastructure spend or construction spend was in in china um and it so that puts it at like yeah double and a bit us yeah u yeah for sure yeah it's um yeah obviously china's a different beast it's significant spend but The thing that struck me was if you actually look into some of the notable projects, they seem quite good value. So like they're building a new subway in New York, 6 billion. ah You can't build a tube in London for anywhere near 6 billion. They're building a high-speed rail across California, 100 billion. Given the size of it, doesn't seem like crazy. Texas high-speed rail, 20 billion. You've got the Hudson River project. They don't seem like crazy numbers. So they're spending a lot, but they're also delivering quite a
00:08:40
Speaker
a sizable amount. It's not like they're just getting crazy numbers, ah which is also quite impressive considering how much they're trying to do sort of in-house or onshore. So they're trying to actually manufacture and produce materials and do everything to avoid having to import as much as possible. So to have relatively sort of, I don't want to say low cost, but what seems like good value schemes and to be doing it in-house is quite impressive. Yeah, I think especially compared to like UK, which is like the most, it seems to be the most expensive way to build it, almost anything. And I don't know whether it's like, I think it's like a combination of things there. There's like a lot of emphasis on design, the architectural, like if you try and build, like if we think about Crossrail, it's interesting to think about what drives the cost of why it is so different or what it would look like if say the UK, even Oz has some projects that ah the spending is
00:09:32
Speaker
Yeah, it doesn't seem, it I agree with you, it seems like it's um it's good value. ah In terms of the contractors that were that operate in the UK, again, it's interesting to, I mean, in the US, it's interesting to see the size of some of those. And it's like a pretty, I would say it's a fairly dynamic and competitive market. the If you look at, say, the list of the top, I don't know, 20 contractors, it's not like there's like three big ones that have all the work. um You've got like 10 odd contractors that are pushing up near the 10 billion a year in construction volume. Yeah, I guess it's ah something that you don't see in every market compared to, you know, compared again to the UK or Australia where the number of competitors are lower, which could also be a length to the ah cost if the competition to bid is lower.
00:10:24
Speaker
Yeah, it's interesting with the size of construction. So the biggest contractor in the US does like $17 billion, which is, I don't know what the exchange rate is, but let's say 15 billion pounds. Valve beat it to 10 billion. And for a British company in much smaller countries, that's quite interesting. So it's definitely got more competition. Yeah, exactly. It's like a lot more competition. No one's dominating. Yeah. And like, if you take, if you take like European contractors, like, like Grouper ACS, which is, I think one of the largest in the world, who own contractors around, they own Dragados, I think they own, uh, in Australia that I think they end up ultimately earning SIMIC and CPB.
00:11:02
Speaker
They do, in construction a year, they do 33 billion euros through group companies. i substantial yeah Yeah, it's like um like Vinci, I think it does 40 billion. Yeah, through 7,000 subsidiaries. Yeah, like if you look across Europe, there's like one contractor in each country completely dominating.
Hudson River Tunnel: A Gateway Scheme
00:11:22
Speaker
So other than the other than the other the projects you're hopeful for when you're when you're when your candidate Trump wins, what are the all the projects that you're excited that you thought were interesting to when you were um hunting through the US?
00:11:37
Speaker
Yeah, so the one that does look really cool is the new tunnel under the Hudson River. So there's this big, they call it the gateway scheme, and it's basically this sort of collection of infrastructure projects in the north, northeast. And the most sort of publicly um shouted about is the it's a tunnel under the Hudson on the the west side of New York. So um that looks really cool. um there's already I know Mesa already involved in that project, who are leading the sort of planning function for the the client. I think it's almost underway. So yeah, if you are a junior QS or engineer, I think that would be dream project, a tunnel to New York City. ah That would be really cool. But it is part of a much broader scheme called the like the Gateway Project. yeahp The other thing is, as ah just to touch on resin commercial,
00:12:26
Speaker
around the Hudson River. They're building a 25 billion residential commercial. That's a serious amount of cash. whoa Yeah, yeah lots of lots of apartments being built ah around what I think is the opening to the Hudson River on the on the western side. So yeah, they're doing a big focus on high-speed rail. So I mentioned a couple earlier, predominantly Texas and California. Yeah, high-speed rail seems to feature you quite heavily. Yeah, so from an infrastructure point of view, some pretty major stuff. um It seems like, and this is me scanning sort of news articles in the end of that, trying to drive people away from driving because the roads are too congested. So at the moment, a lot of people fly or drive by default. Train isn't exactly the most sort of popular and yeah, not the most popular option. So they're trying to really level up their high speed rail network to get people off the roads.
00:13:17
Speaker
Yeah, it's interesting that you were saying that like it's starting soon the tunnel job I think it was it was in like it was only like a year or two ago as part of the the infrastructure jobs act that ah Biden brought in in the US s that it was like given the go ahead and so for it to turn around and go into ah delivery that quickly is it's flagged I saw i you probably saw as well it's like flagged as like the most urgent project in North America or something.
00:13:49
Speaker
Um, and it's, it's hard to imagine the scale of it. It says it's supposed to generate 72,000 direct and indirect jobs. who Um, and sometimes I talk about whenever we onboard someone into the team, I talk about like, uh, how constructions delivered and, and how projects operate and these like projects are their own little business almost. They talk about this idea that like. construction contractors are sometimes this like thin layer of management over the top of all of these projects and that the project director and the management team are kind of like they're running a business. And when it's a mega project like this, they end up going really quickly to becoming like one of the most important businesses in a state or a city this because of the size of it. You'd suddenly turn up at an employer of 72,000 people.
00:14:37
Speaker
all of a sudden over like the a period of like a few months, you've gone from nothing to one of the most important employers ah in a region. And then like as soon as the job finishes, it all dispands and disappears. It's like ah it's like just an interesting odd paradigm that happens in construction that these project teams that have probably never worked together before come together to deliver this project and become one of the most like a major contributor to how a city or a region operates and like an employer and then fast forward a year or two years or five years or something and then it's like disappeared. It was like it was never there.
00:15:16
Speaker
It's interesting because a project like that really can not just boost the local economy because you would expect something that big. The government put in some fairly strict rules to make sure that you're investing in the right supply chain that brings cash into the air and everything's not just so maybe not. maybe that's why Maybe that's why it's so much cheaper there. Maybe that's part of the reason. Maybe that's part of the reason it's so expensive. Yeah, in other places. But like 70, 70,000 people, you could like, you could really change a local economy from a project like that. um I know, obviously, the Hudson River example is New York, it's not exactly like a ah poor economy, but it's, it's, and it's, it's allowing more people to work in the city, the community, the city.
00:15:57
Speaker
Yeah.
Massive US Transmission Line Projects
00:15:58
Speaker
the the other thing that The other thing that is crazy when you look at the some of the projects over there is transmission lines. like We're working with a bunch of transmission line projects here around you know Oz and and and UK, but I've never seen stuff the scale of this. ah so A couple of examples, there's a there's a New Mexico to Arizona ah transmission line that's a couple of billion dollars and it's 520 miles long. All right. Yeah. Right. Uh, and then, and then just to top that there's another one cause like the trans West express transmission line going from Wyoming to Nevada. It's a couple of billion dollars. That is 730 miles long. And then overhead or barrier yeah overhead. Yeah.
00:16:43
Speaker
No, you couldn't bury that. Yeah. Far out. You'd be digging. Yeah. No, overhead. And then there's another one called Gateway West transmission line from Wyoming to Idaho. A couple of billion. It's 1,150 miles long. Thousand. 1,150 miles long. And I'm going to go and just triple check that right now that you've called me out on it, but I'm almost certain that that's correct. Yeah. Serious stuff. The size of the projects are crazy. Yeah. It's 1000 plus miles long. Yeah. That's, that's a long way, man. That's a long way. If you left London and drove a thousand miles, where would you end up? Oh, that's a horrible question. I'm going to say, uh, Northern Spain. I reckon you're getting further than that. I reckon you get into like drip. Yeah.
00:17:38
Speaker
England, let's say Bill Bow, straight line distance. It's miles, remember, not kilometers. Oh, fuck. Yeah, yeah, that's 1,000 kilometers. Shit, you're getting to like Southern Stone. You're getting to Gibraltar. Yeah, you are. Do it. If I've nailed that. I think you might actually, I reckon you're, I'm gonna be really annoyed about you. I can't swear on Gibraltar now. 1,092 miles. Yes! Look at that. No way. There you go, mum. You said I'd never be good at anything. Guessing distances.
00:18:15
Speaker
That's impressive. ab so we' thought Let's not do that ever again now that I'm like one from one. Yeah, yeah. Great while you're ahead. If you actually look at construction spending in general, um so I just pulled this sort of G7 countries, so I didn't include Australia. Most people don't. Yeah, annual spend against population. United States are kind of mid table. Oddly, Canada is spending the most per head 225 billion 39 million and population kind of makes sense given how sparse it is. um But they've got some pretty massive projects at the moment, like the new metro is going into Toronto, but the UK is actually bottom of the list. So we spent the least per head
00:18:58
Speaker
And we're famously poor value schemes, which means we're spending lots of money on not that much in the grand scheme of things. So that was a bit of a worrying stat there. Yeah, right.
G7 Construction Spending: Analyzing the UK's Position
00:19:08
Speaker
Half the the amount per head is Canada, France and Germany. So really? Yeah. Yeah. And all that in London. and so Pretty much all of it in London. Yeah. ah Yeah, London or Manchester gets like, yeah, the majority of it. So um So let's you're ah let's say you're ah you're a a young QS, you've got a full head of hair, you've just you've just graduated, you've got the the chance to go and work in the UK, Australia, um and the US, and you could go anywhere in those countries, where do you go? I've seen way too many videos of snakes inspired us to go anywhere in Australia, so I think I'm gonna go west.
00:19:52
Speaker
I think Toronto Metro would be a cool one. A lot of people enjoy, yeah, traveling through Canada at the moment. I think Hudson would be the coolest, the Hudson River project. And you could like, if you're a QS, you could probably live in Manhattan. If you're an engineer, you might have to go to Jersey, but you know. ah um Yeah, I think one of those two would be quite cool. What would you go for? I'd go to one of these 1000 kilometer. Nah, I wouldn't do that. The 1000 mile um trying to push the lines. I'm imagining like a, like a giant cable drum.
00:20:28
Speaker
with a bit lia files every able otherwise yeah thered be a few of those There's a couple of interesting projects like that. Uh, that sphere in, you know, the like sphere with all the, yeah on the outside, there was a building one in Vegas. that Is it one in New York, the building? I think there's a, there's definitely one in, there's one already done somewhere. I think LA, don't quote me, but then they're building, I'm pretty sure they're building one in Vegas. Yeah. Vegas one's done. Okay. Well then I've got it back to front. So maybe it is New York. Yeah. I think it is New York. They tried to London and the mayor of London told them to miss out. Um, I'm pretty sure it's New York.
00:21:07
Speaker
Okay, yeah, I probably couldn't pass up, yeah, like a Toronto Metro as well. ah Toronto seems like a really cool, it'd be freezing cold, but ah it's about the same as, I guess, about the same as London or colder. Is London freezing? Yeah, it is compared to here. Let's see, weather in Toronto. I'm just double checking this. Oh yeah, it's about the same. There we go, double, two from two. I can nail it. Yeah, I think so. I think that's the project to to to go to. the The tunnel's good, but tunnels are dirty. Not in like a just like it's like it's a lot of moving dirt and then muck and. and Yeah, yeah, totally. But I think working on stations.
00:21:54
Speaker
to be in the city, in the thick of it, definitely exciting. Yeah, we both did it, Stations and Crossrail, it was great. I did do Year in the Tunnels, not so great. I say Year in the Tunnels. It was like I was in there with a spade, but yeah. The scope was in the tunnels. Yeah, the... the The way that projects are delivered there, it's really interesting. If you talk to certain people, they're like, it's wildly different than other people talk about it as like almost similar to, very similar to how everyone else delivers, delivers projects. Maybe there's different terminology. I think we're talking, when we were talking to Richie the other day from Vaya, he was saying it's like the same ah with all the projects that they work with. So I think it would be an interesting experience if I was a QS grad. Do they even need QS's or they can do math without them?
00:22:37
Speaker
I actually know a QS who went over and did a couple of years for Skanska. He said it's a little different. It sounds more like Australia. So the engineers do do a bit of the cost side, but they do actually do. They do have QS's, but they're more sort of commercial managers overseeing contract rather than sort of subcontractor payments and things like that. Yeah. So it does start to paint the picture like the UK is kind of like on its own in the way it does that. And and that could start to paint a picture of why it's so poor value for money. Great value. We'll leave that thought with folks. I'll keep putting it. It's It's the QS capital of the world. um
Listener Feedback: Future Topics and Guests
00:23:17
Speaker
and And you start to wonder, why is a project why are projects so expensive to deliver? Yeah, because they went for the contractor and they're pumping up the price.
00:23:26
Speaker
Yeah. Anyway, right. We're going to have to wrap up there. Thank you very much everyone for listening as always. We are actually going to be sharing a survey. So we'd love your view on what future topics could look like. So please do get involved. Let us know what you'd like to hear about, whether it's a conversation between myself and Jason or particular sort of guests or areas that we'd like to have guests talk about in. So yeah, we'd love to know what you'd like to hear and please do pass her any feedback. The more people that give feedback, the better. Otherwise, it's just the regular people that text us all the time and say, this was good, do this thing, do that. um So yeah, any any feedback is welcome. And then Carlos will give specific shout outs in the future and your feedback might get read out. Thanks, folks. Thank you. See you next week.