RE:Politico: Biden’s incredible shrinking infrastructure planNo doubt inflation is the infrastructure elephant in the room. Inflation is and will be a factor over at least the next several years. However, we must bear in mind that whatever the amount of funds flowing to local projects from the Infrastucture Bill is new money.
Additionally, the Politico piece raises two important considerations:
- Topping up - The idea that approval of supplemental estimates by Congress could account for the loss of buying power; and
- Escalator clauses - in order to protect profit margins it is likely that new contracts will include escalation clauses.
Aditionally, with budgets under pressure from inflation, programs that provide revenue will be viewed more favorably imo; that is QTRH's operational space. While the impact of inflation on both QTRH's business opportunity flow and project profitabiliity bears close monitoring, there is no reason to jump ship at this time.