CHICAGO, Oct 1 (Reuters) – As global economies from Beijing
to Berlin struggle to keep their heads above water, a new wave
of stimulus spending is under way. Given that infrastructure
spending is almost always a function of population growth -
which does not seem to be slowing down in emerging markets -
this is a potent trend if you are a long-term investor.
While any nascent U.S. plan depends upon the outcome of the
November election, the agenda for other countries is full speed
ahead. The Chinese government recently announced new program of
$1 trillion yuan ($157 billion) in infrastructure spending – its
second major wave since 2008. And while most of Europe is still
in a swoon, alternative energy is a big part of the
infrastructure boom in Germany and Japan, where nuclear power is
being ratcheted down. That means more solar panels, wind farms,
biofuels and digital grid installations.
Developing countries also are surging ahead with
infrastructure spending. India, Brazil and other nations are
investing in electrical transmission systems, roads and
telecommunications. It is estimated that “investment
requirements in electricity transmission and distribution are
expected to double through to 2025-30, road construction to
almost double and to increase by almost 50 percent in the water
supply and treatment sector,” according to the Organization for
Economic Co-Operation and Development.
This long-term, global building boom translates into more
business for steelmakers, electrical equipment/telecom
manufacturers, road builders and public works systems and
In the United States, infrastructure spending has been going
on as part of President Barack Obama’s 2009 stimulus package -
although that money has been mostly spent – and more recently
included in a transportation bill. Although Congress has been
reluctant to green-light another major stimulus plan, if Obama
wins a second term, he is promising increased spending.