President Biden’s infrastructure bill proposal to revive the country’s infrastructure should bolster the construction industry's prospects. Although a failed Senate test vote recently dealt the bill a blow, Senators’ plans to advance the bill’s bipartisan framework in the coming days bodes well for construction stocks. Thus, we believe investing in the stock of relatively unsung construction companies Quanta Services (NYSE:PWR), EMCOR Group (EME), and Granite Construction (NYSE:GVA) could be highly rewarding. Let’s discuss.An economic shutdown and supply chain disruptions due to the COVID-19 pandemic battered the construction business last year. However, President Biden’s $1.2 trillion bipartisan infrastructure plan, which was announced earlier this year, to rebuild the nation’s roads, bridges, and other infrastructure should give the construction industry a solid foundation for growth.
Although the proposed infrastructure framework suffered a setback in a recent Senate test vote, the 22 Democratic and GOP senators drawing up the plan said they hope to advance the bill in the coming days. Since this infrastructure plan is at the core of Biden's "Build Back Better" program, the benefits would be even broader for construction materials and heavy machinery companies. Furthermore, the global construction market is expected to reach $12,526.4 billion in 2021, registering a 9% CAGR.
Given this backdrop, we believe under-the-radar construction stocks Quanta Services, Inc. (PWR), EMCOR Group, Inc. (EME), and Granite Construction Incorporated (GVA) could generate solid returns in the coming months.