The infrastructure space is expected to benefit from increasing infrastructure spending as the global economy gradually reopens. Furthermore, President Biden’s proposal to spend $2 trillion-plus to rebuild infrastructure and reshape the U.S. economy could turbo-drive drive the industry’s growth. Given this backdrop, we believe lesser-known companies in the infrastructure sector, such as Federal Signal (NYSE:FSS) and Columbus McKinnon (CMCO), could deliver solid returns in the near term. Read on.As the global economy gradually reopens, infrastructure-related activities—such as building and repairing bridges, roads and tunnels—are expected to increase markedly. Investors are taking note of this and increasingly betting on the infrastructure space. This is evident from iShares U.S. Infrastructure ETF’s (IFRA) 16.9% returns over the past three months compared to SPDR S&P 500 ETF Trust (SPY) 8.8% gains.
The infrastructure sector is also expected to receive a major boost from President Joe Biden’s proposed $2 trillion-plus infrastructure spending.
So, we think it wise to bet on Federal Signal Corporation (FSS) and Columbus McKinnon Corporation (CMCO). These companies are not necessarily making headlines, but we expect them to gain significantly in the coming months by leveraging their strong business models.