What does a C grade on U.S. infrastructure mean for investors? | J.P. Morgan Asset Management

What does a C grade on U.S. infrastructure mean for investors?

Aaron Mulvihill

Global Market Strategist

Published: 4 days ago
Listen now
00:00

The American Society of Civil Engineers (ASCE) has just released its 2025 Report Card for America's Infrastructure, highlighting a critical national need but also a significant opportunity for investors seeking portfolio diversification.

Founded in 1852, the ASCE is the oldest national civil engineering organization in the United States, representing over 160,000 engineers. Beginning in 1988, every four years, the organization has published a "Report Card" that evaluates the state of U.S. infrastructure across 18 categories, using an elementary-school-style grading system.

The nation’s overall infrastructure grade this year modestly improved to a C, up from a C- in 2021. This progress was helped by stimulus from the 2021 Infrastructure Investment and Jobs Act (IIJA) and the 2022 Inflation Reduction Act (IRA), along with a significant influx of private funding into infrastructure projects.

While transportation and water infrastructure show improvements, the energy sector has slipped to a D+, raising concerns about capacity and future demands. With electricity consumption surging due to the adoption of electric vehicles and the demands of data centers, the need for power grid upgrades is urgent. As utilities work to double transmission capacity and incorporate renewable energy sources, private investment is crucial to drive innovation and enhance the reliability of the nation's power grid.

The ASCE projects $5.4 trillion in public and private investment flows from 2024 through 2033, based on current funding plans. However, this still leaves a substantial gap in achieving a B rating, or a state of "good repair," across all infrastructure categories. The organization estimates a $3.7 trillion funding shortfall over the next decade, which could widen significantly if Congress reduces funding from existing federal programs.

For investors, this persistent infrastructure gap presents compelling opportunities for several reasons:

Essential, non-cyclical assets: Infrastructure provides vital services that remain in demand regardless of economic conditions, offering stability that can counterbalance volatility in traditional financial markets.

Public-Private partnership potential: The report advocates for expanded use of public-private partnerships and additional financing tools, creating avenues for private capital to participate in infrastructure development.

Inflation protection: Infrastructure like public utilities are effective inflation hedges, as they pass on cost increases to rate-payers to ensure investors are paid a stable return on investment. For investors concerned about inflation eroding their spending power, this can be a significant advantage.

Energy transition opportunities: With energy receiving a concerning D+ rating (down from a C- in 2021), there is renewed urgency for investment in generation, transmission and distribution, creating opportunities for private investors.

The ASCE's report serves as a timely reminder of the essential role infrastructure plays in the economy and the opportunities it presents for long-term investors. Amid volatile public markets, infrastructure investments can offer more stable and predictable returns. While the C grade reflects the ongoing challenge in maintaining and improving the country’s infrastructure, it also highlights the progress made and the potential for future investment. 

The ASCE projects $5.4 trillion in public and private investment flows from 2024 through 2033, based on current funding plans. However, this still leaves a substantial gap in achieving a B rating, or a state of "good repair," across all infrastructure categories.

The American Society of Civil Engineers (ASCE) has just released its 2025 Report Card for America's Infrastructure, highlighting a critical national need but also a significant opportunity for investors seeking portfolio diversification.

Founded in 1852, the ASCE is the oldest national civil engineering organization in the United States, representing over 160,000 engineers. Beginning in 1988, every four years, the organization has published a "Report Card" that evaluates the state of U.S. infrastructure across 18 categories, using an elementary-school-style grading system.

The nation’s overall infrastructure grade this year modestly improved to a C, up from a C- in 2021. This progress was helped by stimulus from the 2021 Infrastructure Investment and Jobs Act (IIJA) and the 2022 Inflation Reduction Act (IRA), along with a significant influx of private funding into infrastructure projects.

While transportation and water infrastructure show improvements, the energy sector has slipped to a D+, raising concerns about capacity and future demands. With electricity consumption surging due to the adoption of electric vehicles and the demands of data centers, the need for power grid upgrades is urgent. As utilities work to double transmission capacity and incorporate renewable energy sources, private investment is crucial to drive innovation and enhance the reliability of the nation's power grid.

The ASCE projects $5.4 trillion in public and private investment flows from 2024 through 2033, based on current funding plans. However, this still leaves a substantial gap in achieving a B rating, or a state of "good repair," across all infrastructure categories. The organization estimates a $3.7 trillion funding shortfall over the next decade, which could widen significantly if Congress reduces funding from existing federal programs.

For investors, this persistent infrastructure gap presents compelling opportunities for several reasons:

  1. Essential, non-cyclical assets: Infrastructure provides vital services that remain in demand regardless of economic conditions, offering stability that can counterbalance volatility in traditional financial markets.
  2. Public-private partnership potential: The report advocates for expanded use of public-private partnerships and additional financing tools, creating avenues for private capital to participate in infrastructure development.
  3. Inflation protection: Infrastructure like public utilities are effective inflation hedges, as they pass on cost increases to rate-payers to ensure investors are paid a stable return on investment. For investors concerned about inflation eroding their spending power, this can be a significant advantage.
  4. Energy transition opportunities: With energy receiving a concerning D+ rating (down from a C- in 2021), there is renewed urgency for investment in generation, transmission and distribution, creating opportunities for private investors.

The ASCE's report serves as a timely reminder of the essential role infrastructure plays in the economy and the opportunities it presents for long-term investors. Amid volatile public markets, infrastructure investments can offer more stable and predictable returns. While the C grade reflects the ongoing challenge in maintaining and improving the country’s infrastructure, it also highlights the progress made and the potential for future investment. 

U.S. infrastructure funding gap*

USD billions, as of 2024

USD billions, as of 2024

Source: American Society of Civil Engineers, J.P. Morgan Asset Management.

Categories are established by the ASCE in the March 2025 “A Comprehensive Assessment of America’s Infrastructure: 2025 Report Card for America’s Infrastructure” report. *Funding gap is defined as the amount of investment needed from 2024-2033 in excess of the amount that is currently in place by U.S. law. Funded figures assume investments continue at current legislative appropriations throughout the period. The funding amount needed is to get each category to a “B” rating, or a state of “Good” repair, as defined by the ASCE. **Water includes dams, drinking water,  inland waterways & ports, levees and wastewater & stormwater categories. ***Transit includes bridges, rail and transit categories.

Data are based on availability as of March 25, 2025.

09jn252603095636
Aaron Mulvihill

Global Market Strategist

Published: 4 days ago
Listen now
00:00

The American Society of Civil Engineers (ASCE) has just released its 2025 Report Card for America's Infrastructure, highlighting a critical national need but also a significant opportunity for investors seeking portfolio diversification.

Founded in 1852, the ASCE is the oldest national civil engineering organization in the United States, representing over 160,000 engineers. Beginning in 1988, every four years, the organization has published a "Report Card" that evaluates the state of U.S. infrastructure across 18 categories, using an elementary-school-style grading system.

The nation’s overall infrastructure grade this year modestly improved to a C, up from a C- in 2021. This progress was helped by stimulus from the 2021 Infrastructure Investment and Jobs Act (IIJA) and the 2022 Inflation Reduction Act (IRA), along with a significant influx of private funding into infrastructure projects.

While transportation and water infrastructure show improvements, the energy sector has slipped to a D+, raising concerns about capacity and future demands. With electricity consumption surging due to the adoption of electric vehicles and the demands of data centers, the need for power grid upgrades is urgent. As utilities work to double transmission capacity and incorporate renewable energy sources, private investment is crucial to drive innovation and enhance the reliability of the nation's power grid.

The ASCE projects $5.4 trillion in public and private investment flows from 2024 through 2033, based on current funding plans. However, this still leaves a substantial gap in achieving a B rating, or a state of "good repair," across all infrastructure categories. The organization estimates a $3.7 trillion funding shortfall over the next decade, which could widen significantly if Congress reduces funding from existing federal programs.

For investors, this persistent infrastructure gap presents compelling opportunities for several reasons:

Essential, non-cyclical assets: Infrastructure provides vital services that remain in demand regardless of economic conditions, offering stability that can counterbalance volatility in traditional financial markets.

Public-Private partnership potential: The report advocates for expanded use of public-private partnerships and additional financing tools, creating avenues for private capital to participate in infrastructure development.

Inflation protection: Infrastructure like public utilities are effective inflation hedges, as they pass on cost increases to rate-payers to ensure investors are paid a stable return on investment. For investors concerned about inflation eroding their spending power, this can be a significant advantage.

Energy transition opportunities: With energy receiving a concerning D+ rating (down from a C- in 2021), there is renewed urgency for investment in generation, transmission and distribution, creating opportunities for private investors.

The ASCE's report serves as a timely reminder of the essential role infrastructure plays in the economy and the opportunities it presents for long-term investors. Amid volatile public markets, infrastructure investments can offer more stable and predictable returns. While the C grade reflects the ongoing challenge in maintaining and improving the country’s infrastructure, it also highlights the progress made and the potential for future investment. 

Copyright 2025 JPMorgan Chase & Co. All rights reserved.

This website is a general communication being provided for informational purposes only. It is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purposes. By receiving this communication you agree with the intended purpose described above. Any examples used in this material are generic, hypothetical and for illustration purposes only. None of J.P. Morgan Asset Management, its affiliates or representatives is suggesting that the recipient or any other person take a specific course of action or any action at all. Communications such as this are not impartial and are provided in connection with the advertising and marketing of products and services. Prior to making any investment or financial decisions, an investor should seek individualized advice from personal financial, legal, tax and other professionals that take into account all of the particular facts and circumstances of an investor's own situation.

 

Opinions and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice. We believe the information provided here is reliable but should not be assumed to be accurate or complete. The views and strategies described may not be suitable for all investors.

 

INFORMATION REGARDING INVESTMENT ADVISORY SERVICES: J.P. Morgan Asset Management is the brand for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. Investment Advisory Services provided by J.P. Morgan Investment Management Inc.

 

INFORMATION REGARDING MUTUAL FUNDS/ETF: Investors should carefully consider the investment objectives and risks as well as charges and expenses of a mutual fund or ETF before investing. The summary and full prospectuses contain this and other information about the mutual fund or ETF and should be read carefully before investing. To obtain a prospectus for Mutual Funds: Contact JPMorgan Distribution Services, Inc. at 1-800-480-4111 or download it from this site. Exchange Traded Funds: Call 1-844-4JPM-ETF or download it from this site.

 

J.P. Morgan Funds and J.P. Morgan ETFs are distributed by JPMorgan Distribution Services, Inc., which is an affiliate of JPMorgan Chase & Co. Affiliates of JPMorgan Chase & Co. receive fees for providing various services to the funds. JPMorgan Distribution Services, Inc. is a member of  

 

INFORMATION REGARDING COMMINGLED FUNDS: For additional information regarding the Commingled Pension Trust Funds of JPMorgan Chase Bank, N.A., please contact your J.P. Morgan Asset Management representative.

 

The Commingled Pension Trust Funds of JPMorgan Chase Bank N.A. are collective trust funds established and maintained by JPMorgan Chase Bank, N.A. under a declaration of trust. The funds are not required to file a prospectus or registration statement with the SEC, and accordingly, neither is available. The funds are available only to certain qualified retirement plans and governmental plans and is not offered to the general public. Units of the funds are not bank deposits and are not insured or guaranteed by any bank, government entity, the FDIC or any other type of deposit insurance. You should carefully consider the investment objectives, risk, charges, and expenses of the fund before investing.

 

INFORMATION FOR ALL SITE USERS: J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide.

 

NOT FDIC INSURED | NO BANK GUARANTEE | MAY LOSE VALUE

 

Telephone calls and electronic communications may be monitored and/or recorded.

 

Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our privacy policies at https://www.jpmorgan.com/privacy.

 

If you are a person with a disability and need additional support in viewing the material, please call us at 1-800-343-1113 for assistance.

 

READ IMPORTANT LEGAL INFORMATION. CLICK HERE >

 

The value of investments may go down as well as up and investors may not get back the full amount invested.

 

Diversification does not guarantee investment returns and does not eliminate the risk of loss.