On March 31st US President Joe Biden announced his plan to rebuild the US infrastructure. He estimates that this program will create up to 10 million jobs in the green energy industry. The government plans to spend up to $4 trillion in total. We are talking about the fundamental improvement to infrastructure. It should stimulate the US economy that was seriously affected during the pandemic. First of all, the plan concerns the improvement of the following US facilities: roads, bridges, power grids, and water supply systems.
Transportation companies, construction equipment manufacturers, natural resource companies, manufacturers of building materials and intelligent instruments will benefit from the implementation of this plan.
Based on that, it is worth considering the following companies: Rio Tinto, Vulcan Materials, CSX, Badger Meter, Caterpillar, Nucor.
An important point in the implementation of the program is the energy efficiency in buildings. The plan is to upgrade 4 million infrastructure facilities over the next 4 years. In this regard, we highlight such companies as Honeywell, Trane Technologies, and Johnson Controls.
The next important point is the manufacturing of electric cars and charging stations. We believe that the main beneficiaries in this area will be: Nvidia, Paccar, Aptiv, Tesla.
Since the infrastructure improvement will be partially funded through the issuance of new debt (bonds), companies specializing in business valuation and rating agencies will also benefit: S&P Global, Moody’s.
One of Biden’s main goals in the electric energy sector is to achieve carbon-free energy by 2035. This part of the plan will benefit the following companies: Eaton, First Solar, Southern, General Electric.
Separately, the equipment rental companies in the United States should also be taken note of, such as United Rentals.
We also anticipate that companies involved in infrastructure projects and those that can offer solutions for business data processing will have additional growth incentives. Going forward, this will ensure well-paid jobs and require a technology solution for processing payroll data. In this area, we can highlight Automatic Data Processing and Paychex.
Through the implementation of Biden’s program, infrastructure projects will help employ more than a hundred thousand Americans who lost their jobs during the pandemic. President’s announcement was well received by the markets. Journalists compare this plan with similar actions by President Franklin Roosevelt, who through government-funded infrastructure and public works projects for millions of Americans was able to end the Great Depression.