Infrastructure spending promises boost for construction cos.

Plans to pump money into rebuilding the nation’s roads, bridges and other infrastructure could give companies with ties to the construction industry a solid foundation for growth.

President Joe Biden announced Thursday that a bipartisan agreement had been reached on a $973 billion infrastructure plan. The pared-down plan calls for $559 billion in new spending over five years.

Companies such as 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. Both companies’ shares rose Thursday after the bipartisan deal was struck. Smaller construction-related companies benefitted as well: Dycom, which provides contractor services to construction companies, rose nearly 6%.

The infrastructure 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.

“From an economic growth perspective, we see the infrastructure deal really boosting productivity,” said Ken Johnson, investment strategy analyst at Wells Fargo Investment Institute.

The deal agreed to Thursday still has a ways to go. For one thing, Biden said he’ll only sign the deal only if a far larger, $4 trillion reconciliation bill — which would contain his other priorities — also comes to his desk.

Also, the compromise package is less than the $2 trillion the president originally sought for infrastructure and focuses more on hard infrastructure...