The Bond Buyer’s research report, The Role of Munis in the Future of Cities, examines how stakeholders are reassessing infrastructure plans amid global market volatility

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This report details municipal stakeholders’ views of the current and future environment, outlining the challenges and opportunities to get major infrastructure projects completed in the United States.

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"The Infrastructure Investment and Jobs Act provides billions in grants for state and local governments. Where municipal finance professionals are challenged now is how quickly and effectively they can spend it amid an inflation-fueled rising-rate environment."

A new study conducted by Arizent, the parent company of The Bond Buyer, a comprehensive resource for municipal finance professionals, examines the current state of infrastructure planning and finds low levels of confidence toward infrastructure policies amid recession fears, inflation, political divisions and difficulties with accessing funds.

The Infrastructure Investment and Jobs Act (IIJA) was signed into law in November 2021, during a time of extremely low interest rates and record-high stock market returns and provided one of the largest federal investments into infrastructure, including $550 billion of new spending over the next five years.

“The Infrastructure Investment and Jobs Act provides billions in grants for state and local governments. Where municipal finance professionals are challenged now is how quickly and effectively, they can spend it amid an inflation-fueled rising-rate environment,” said Janet King, VP Arizent research.

Macroeconomic conditions have changed dramatically since then, creating new challenges to an expensive and complicated system of planned infrastructure. With three quarters of these projects being funded by state and local governments, along with the support from the municipal bond market, stakeholders have pressing concerns about the future of these investments.
One-quarter (23%) of respondents said an impending recession is the biggest issue at the top of their minds while rising interest rates and market volatility are both at 14%, inflation is at 13% and loss of revenue is at 10%.

“Even before the record-high inflation that we’re currently experiencing, the United States already faced the highest costs in the world for infrastructure projects,” Lynne Funk, Executive Editor at The Bond Buyer, says, “Market conditions this year have also caused the biggest municipal losses since the 1980s. 14 years’ worth of price gains were rolled back in just 10 months.”

When asked about current legislation policies for infrastructure investments, only 30% of participants believe these actions will be sufficient for completing projects. 3% described themselves as very confident, 27% as somewhat confident, 18% as not confident, 39% as somewhat pessimistic and 13% as very pessimistic. Furthermore, only one-in-three respondents acknowledge that they have accessed or will plan to access IIJA funds in the future, reinforcing the low levels of confidence among stakeholders.

The report further explores the impact of political party affiliations on perception of legislative policies, as well as macro issues affecting the industry like climate change.

Additional coverage from The Bond Buyer about infrastructure investments can be read here.

The full report can be found here:

American Banker: https://www.americanbanker.com/research-report/reassessing-infrastructure-investing-amid-global-market-volatility

The Bond Buyer: https://www.bondbuyer.com/research-report/reassessing-infrastructure-investing-amid-global-market-volatility

Financial Planning: https://www.financial-planning.com/research-report/reassessing-infrastructure-investing-amid-global-market-volatility

Research background/Methodology

This online research was conducted by Arizent, parent company of The Bond Buyer, from August 18 to September 25 2022 with 152 respondents from the municipal securities market. The survey aimed to investigate what participants are thinking about infrastructure issues and priorities facing American cities and towns. The survey also explored sentiment about the impact of various macroeconomic events and policy decisions on infrastructure initiatives and gauges confidence in the ability to solve key challenges moving forward.

For more information on this survey or other Arizent research, contact:
Janet King
Vice President, Research Arizent
janet.king@arizent.com
M 207-807-4806

About Arizent Research
Arizent Research delivers actionable insights through full-service research solutions that leverage their first-party data, subject matter expertise, and highly engaged communities across the banking, payments, mortgage, insurance, municipal finance, accounting, HR/employee benefits and wealth management communities. They conduct research to support original insights and analysis for their various editorial and content brands, as well as custom research programs for clients in the industries they serve.

About Arizent
Arizent is a business information company that advances professional communities by providing insights and analysis and convening industry leaders. The company uses deep industry expertise and a data-driven platform to deliver its services, which include subscriptions, marketing services, live events and access to Leaders, an executive forum. Arizent also connects business communities through leading financial services brands like American Banker, The Bond Buyer, Financial Planning and National Mortgage News, as well as professional services brands like Accounting Today, Employee Benefit News and Digital Insurance.

About The Bond Buyer
Since 1891, The Bond Buyer has empowered issuers, investors and other municipal finance professionals with unique analysis and insight into the most innovative deals impacting the nation. Across its journalism, events, research and benchmarking, The Bond Buyer helps the public finance industry navigate the complexities of policy, regulation, market activity, infrastructure, ESG, public/private partnerships and more. As the only independent resource serving the complete municipal finance community, The Bond Buyer’s authoritative content connects leaders online, in person and in print every day.

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Janet King
Arizent
207-807-4806
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