Infrastructure spending promises boost for industry
Plans to pump money into rebuilding the nation’s roads, bridges and other infrastructure could give companies that make machinery and materials a solid foundation for growth.
Caterpillar, with its heavy machinery, and construction materials company Vulcan Materials could see years of additional business as roads and bridges are rebuilt and buildings are modernized. The benefits would be even broader, impacting Sherwin-Williams, United Rentals and others that make, sell, or rent anything used for construction.
The plans are long overdue, economists and business leaders have said, as the nation’s roads, bridges and other infrastructure age without any significant overhaul. The American Society of Civil Engineers gave the nation’s roads a poor grade in its 2021 report, saying 40% of the system is now in poor or mediocre condition. Bridges, schools and much of the key infrastructure in the U.S. doesn’t score much better.
Washington is still debating the size and scope of any spending package, but economists and analysts expect an eventual deal that will help support a wide swath of industries tied to a national infrastructure overhaul.
“From an economic growth perspective, we see the infrastructure deal really boosting productivity,” said Ken Johnson, investment strategy analyst at Wells Fargo Investment Institute.
Analysts at Citi and elsewhere have been focusing on the president’s $1.7 trillion American Jobs Plan. That amount, or close to it, seems likely to be what Congress eventually approves or enacts through other means.
Any deal that makes it to the president’s desk for a signature will be spread out over many years, giving stock values an initial boost before the long-term benefits to profits and revenue kick in. And it’s the larger companies that will likely see...
