Reindustrialization and Infrastructure Fueling Growth Beyond Tech: Kathryn Thompson

Infrastructure Spending and Materials Sector

• 💡 The Infrastructure Investment and Jobs Act (IIJA), with approximately $300 billion allocated, is a significant tailwind for the materials sector.
• 🎯 Despite the bill's expiration in September, only 50% of its funds have been spent, indicating continued momentum.

Modern Reindustrialization and Mega Projects

• 🏗️ Beyond traditional non-residential construction like malls, mega projects are driving the modern reindustrialization of America.
• ⚡ Key drivers include data centers and the energy buildout.
• 🏢 Large-scale corporate headquarters, such as the Oracle headquarters in Nashville, also contribute significantly to this trend.
• ⚠️ The residential sector is the only end-market with a subdued outlook heading into the next year.

Onshoring and Greenfield Development

• 🏭 CEOs in the transport sector report customer expectations for increased onshoring and greenfield development in 2026.
• 📈 This trend suggests companies are bringing more operations back domestically.

Beneficiary Stocks and Investment Trends

• 🪨 Basic materials companies like Martin Marietta, Vulcan Materials, and CRH are direct beneficiaries, supplying essential components like crushed rock, cement, concrete, and asphalt.
• 💧 Value-add distributors in water infrastructure (Ferguson, Core & Main) and electrical infrastructure (Westlake) are also highlighted.
• 🛠️ Companies involved in maintenance post-project completion, such as APG and TIC, represent another investment opportunity.
• 📊 Investors are advised to focus on the reindustrialization of America trend, particularly in the Southeast and Southwest, rather than picking individual tech winners.

Rate Cuts and Sector Performance

• 📈 Heavy materials are expected to benefit the most from potential rate cuts, due to their stronger tie to the residential sector.
• 🏠 Even a modest rally in residential construction would provide a significant boost to basic materials companies.