A Bridge to Somewhere?
Infrastructure across the U.S. is failing. Scores of aging highways, bridges, airports, and water systems need repair. A government infrastructure spending package could significantly drive economic activity and revenues for companies that are involved in any future reconstruction.

  • ​​The U.S. faces more than a $2 trillion infrastructure funding gap, defined as needed investment less estimated funding, through 2025. The country’s overall grade on the state of infrastructure is a D+, according to the American Society of Civil Engineers.1​

  • State and local governments are responsible for public infrastructure as they own over 90% of non-defense public infrastructure assets.2 Unfortunately, state and local government spending on infrastructure is at the lowest level in over half a century.3

  • The Trump administration proposed a $1.5 trillion infrastructure plan earlier this year. However, lawmakers are currently exchanging ideas about how to fund potential legislation and a firm plan has not yet materialized.

  • Potential beneficiaries of a large infrastructure spending program may be materials companies, specifically those producing construction materials such as aggregates and cement, as well as industrial companies, including those that produce machinery.

1 ASCE, “2017 Infrastructure Report Card.”

2 Center on Budget and Policy Priorities calculations of U.S. Bureau of Economic Analysis data on fixed assets, 2015

3 Based on state and local government gross investment as a percentage of GDP in 2016 using data from the U.S. Bureau of Economic Analysis.

The views expressed are the views of Fred Alger Management, Inc. as of April ​2018. These views are subject to change at any time and they do not guarantee the future performance of the markets, any security or any funds managed by Fred Alger Management, Inc. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities.

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