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IHS Markit Perspectives Series [Special] - US Infrastructure Bill

16 August 2021

IHS Markit's Perception Analytics team engages in in-depth discussions with investors and analysts daily. Given recent progress around increasing government spending on infrastructure, we spoke with investors and analysts to understand how potential legislation on infrastructure spending has impacted their investment theses to better understand how the investment community is evaluating the impact. Additionally, the market was probed on how affected companies should be framing conversations with investors about the impact such legislation would have on their business and investment case.

Highlights include:

Several investors and analysts assert that a potential infrastructure bill in the US has positively impacted their willingness to invest in related sectors and note the importance of companies cautiously framing how they stand to benefit.

"Some of these companies are driven by macro infrastructure spending, so they stand to benefit. It is important for companies to explain how their business is driven by macro impacts such as this to make sure expectations are appropriately understood."

However, some participants assert that the potential passing of an infrastructure spending bill has already been priced in by the market, so there is less upside optionality.

"It has been part of our assumption that some type of spending bill would get passed; therefore, it is included in our outlook for the industrials group over the next several years."

Furthermore, many participants remain unsure of the impact that the passing of an infrastructure bill will have and believe it is too early to begin speculating on what stocks stand to benefit.

"These things probably take longer to play out. We would not invest in something because we think there is a big infrastructure bill."

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