Construction: The New US Infra Bill Implications For Construction Stocks

The proposed Build America 250 bill offers flat nominal funding for highways, resulting in limited real volume growth when adjusted for construction inflation. The bill shifts focus toward bridge renovations while cutting funds for rail and transit.

Key Takeaways

• 1.The 'Build America 250' bill provides a broadly flat nominal spend (+8%) for highways, which implies flat or slight real volume declines net of inflation.
• 2.There is a significant sector mix shift: Bridges see increased funding (+29%), while Railroads (-37%) and Transit (-5%) face cuts.

Table of Contents

• CONSTRUCTION
• A leg up for bridges, rail + transit see cuts
• Highways in detail - Limited expansion, especially net of inflation
• Our forecasts are underpinned by:
• Stock implications mixed
• Recent updates + Future catalysts
• US Public Construction Backdrop
• Highways in Detail (c.25% Public Construction, 6% Total Construction)
• Tax receipts vs public non-residential construction spending
• Public construction starts vs public non-residential construction spending.
• Institutional building planning index vs public non-residential construction spending
• Private non-residential construction spending vs public non-residential construction spending.