Shares of construction-related companies reached all-time highs in the aftermath of Donald Trump’s victory on Tuesday amid expectations that his presidency will spark a deluge of work for material suppliers, engineers – and possibly firms experienced in building very large walls.
The president-elect used his victory speech in the small hours of yesterday to repeat his pledge to put "millions of people to work" rebuilding American infrastructure, airports, schools and hospitals.
During his campaign the celebrity tycoon compared himself to President Dwight D. Eisenhower, who championed the massive build-out of America’s vast interstate highway system.
Stock markets responded to his poll-defying win enthusiastically.
Vulcan Materials, which makes cement, asphalt mix, crushed stone and gravel, posted a 10% rise, the biggest one-day gain since its stock went public in 1972, reports Market Watch.
Martin Marietta Materials, another producer of aggregates and heavy materials, recorded a 12% boost to its highest level since going public in 1994. US Concrete climbed 11%, Summit Materials were up 9.4%, Granite Construction was also up 11% to a nine-year high, and Eagle Materials surged 8.4% to a two-year high.
By contrast, the shares of Mexican cement giant Cemex fell 7.1% amid a broad, sharp selloff in the Mexican stock market.
Trump-induced euphoria hit US engineers, too. Aecom’s stock rose almost 13% and Jacobs Engineering Group closed up nearly 10%.
It even crossed the Atlantic, with shares in European construction and infrastructure firms active in the US spiking sharply upward.
Shares in Ireland’s building materials giant CRH soared nearly 7% before lunchtime, hitting a nine-year high. Balfour Beatty saw a 10% leap, Skanka’s jumped 7.5%, while Spain’s Ferrovial, a veteran developer of privately financed transport infrastructure in the US, saw its price increase 5% throughout the day.
Aecom chief Executive Mike Burke was quoted by the Wall Street Journal as saying: "Upgrading the infrastructure we have, and advancing what’s necessary to meet the demands of new growth will require national support for alternative delivery methods, including public and private partnerships."
The opinion on Wall Street was that the new Eisenhower meant what he said about investing in infrastructure, and would be able to implement his programme given Republican control of both houses of Congress – a guarantee of federal paralysis had Hilary Clinton won.
The US spends about $1.1 trillion a year on construction, of which infrastructure takes up $150bn. Trump has suggested his spending programme could increase that by at least 60% a year.
Jason Pride, director at wealth management firm Glenmede, said in a note to clients that with a Trump as president, and with Republicans sweeping Congress, the promise to increase infrastructure spending "has the highest likelihood of policy follow-through", Market Watch reported.
Image: Construction stocks soar on Trump’s promises (Creative Commons)