Morgan Stanley strategists are coming out very bullish on the building materials sector should a long overdue infrastructure bill get passed under President Joe Biden.
“U.S. infrastructure investment has run $1.25 trillion below trend over the past decade. An infrastructure deal could set the stage for a super cycle, especially in cement, with beneficiaries re-rating,” said a 15-person team of Morgan Stanley strategists in a new report titled “Paving the Way for U.S. Infrastructure Super Cycle.” “An infrastructure package could catapult building materials into a super cycle similar to the 1950s. We are 10 years into the current construction cycle, exiting a recession, and potentially facing a government-underwritten cycle of another 10 years.”
The group estimates the U.S. infrastructure needs $3 trillion in repairs. As