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The infrastructure buildout that launched America's reindustrialization is nearing completion — the next leg of growth points toward grassroots manufacturing and machinery, where improving fundamentals meet compelling valuations.
Key Takeaways:
- The first phase of reshoring was infrastructure-led and heavily supported by government spending, but that tailwind is now maturing as key programs near full allocation and construction growth levels off.
- The next phase is likely to be manufacturing-led, supported by lower interest rates, a more favorable policy backdrop for private industrial investment, and improving activity indicators across surveys and freight.
- Many infrastructure beneficiaries have already re-rated, while select grassroots manufacturing and machinery businesses still appear under-earning and attractively valued.
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