The Top 6 Infrastructure Investment Opportunities
For years, the country's infrastructure - critical structures and facilities like roads, power supplies, and internet access - has been in poor condition. Now, the government is pledging nearly $550B in new investments.
The Top 6 Infrastructure Investment Opportunities
The U.S. government is putting a focus on infrastructure investment. For years, the country’s infrastructure—critical structures and facilities like roads, power supplies, and internet access—has been in poor condition.
Now, the government is pledging billions of dollars in funding. In this graphic from New York Life Investments, we explore how this public commitment translates into six potential infrastructure investment opportunities.
Breaking Down the Infrastructure Investment and Jobs Act
The Infrastructure Investment and Jobs Act was signed into law in November 2021. It includes nearly $550 billion in new investments.
Based on these commitments, here are the six categories that present potential infrastructure investment opportunities.
1. Transportation
52.0% of new government funding
Because infrastructure has been underfunded for some time, transportation systems are in a state of disrepair.
43% of roads are in poor or mediocre condition
231,000 of the country’s 617,000 bridges are in need of repair or preservation work
New government funding will enable the expansion and repair of transportation infrastructure.
The infrastructure investment opportunity: Funding could increase revenue and provide stable long-term contracts to engineering, materials, and construction companies.
2. Broadband
11.9% of new government funding
Millions of Americans don’t have access to broadband (high speed) internet, and the number of people who don’t use it is even higher due to affordability issues.
People without access: 14.5 million
People who don’t use broadband: 120.4 million
New government funding will increase access and help reduce prices.
The infrastructure investment opportunity: Funding could boost the customer base and revenue of internet service providers.
3. Energy & Power
11.9% of new government funding
The U.S. has set a goal to have net zero emissions by 2050, yet the country gets most of its energy with fossil fuels.
New government funding will help build electric power transmission lines and facilitate clean energy technology.
The infrastructure investment opportunity: Funding could boost the revenue of utility, manufacturing, and renewable energy companies.
4. Water
11.6% of new government funding
U.S. water infrastructure is aging, with 14-18% of potable water lost through leaks. The annual costs of wasting this treated water is projected to increase from $7.6 billion in 2019 to $16.7 billion in 2039.
New government funding will modernize water infrastructure, invest in water storage and recycling, and remove lead pipes.
The infrastructure investment opportunity: Funding could boost the revenue of engineering firms and companies that build, install, and repair water pipes.
5. Climate & Cybersecurity Resiliency
8.7% of new government funding
Climate disasters and cyber attacks are leading to increased costs & destruction of infrastructure. In 2020, there were 22 U.S. climate disasters that each cost over $1 billion in damage—with a total cost of $100 billion.
New government funding will invest in protection against cyber attacks, floods, droughts, and other climate disasters.
The infrastructure investment opportunity: Funding could boost the revenue of companies involved in cybersecurity, weatherization, environmental consultation, and construction.
6. Environmental Remediation
3.9% of new government funding
Contaminated sites are causing environmental harm or hindering land reuse, and there are more than 450,000 of them across the country. New government funding will clean up contaminated land, reclaim abandoned land mines, and plug orphaned oil and gas wells.
The infrastructure investment opportunity: Funding could boost the revenue and long-term contracts of environmental remediation companies.
Public Funding, Private Infrastructure Investment Opportunities
A boost in government funding is likely to create increased activity in private infrastructure-related areas:
Engineering
Construction
Materials
Internet Service Providers
Clean Energy Tech
Pipe Installation
Cybersecurity
Environmental Consultation
By paying attention to where the money is going, investors can consider a variety of categories that provide critical services—and capitalize on upcoming trends.