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Barrick Gold:
Revenue Slowdown Poses Concerns

After months of back-room negotiations, infighting, compromises and delays, the $1.2 trillion infrastructure bill overcame its final hurdle on November 5, when the House of Representatives passed the legislation with bipartisan support. The Senate approved the bill last August, notes Charles Sizemore, Kiplinger’s Personal Finance.

The new law includes about $570 billion in new spending above previously expected federal levels. It provides funding for roads, bridges and major projects; investment in railway maintenance, modernization and expansion; and spending on ports and airports.

Other funding goes to bolster the country’s infrastructure against climate change and cyberattacks, improve drinking water, and update and expand the power grid. It also funds broadband infrastructure and development.

Most spending will start in the second half of 2022, but the majority of the funds won’t be spent until 2024 and later. The spending will be paid for with a variety of revenue streams, including repurposed funds originally intended for coronavirus relief; money saved by delaying a Trump-era rule on Medicare drug rebates; and sales of wireless spectrum space. The Congressional Budget Office, Congress’s nonpartisan scorekeeper, found that the bill would widen the federal budget deficit by $256 billion over 10 years.

Economists generally agree that over the long term, improving infrastructure provides a positive contribution to U.S. economic growth and employment, according to a report by Moody’s Analytics. It lowers business costs and thus improves competitiveness and productivity; allows workers to live closer to where they work and makes it easier for them to hold jobs; and reduces carbon emissions. It should also help alleviate future supply-chain kinks.

The deal will create more than 800,000 jobs at its peak impact in the middle of the decade, according to Moody’s estimates.

Where to invest? As America’s largest producer of construction aggregates – which includes crushed stone, sand and gravel – and a major producer of asphalt and cement, Vulcan Materials (VMC) should benefit from the infrastructure legislation’s $110 billion in funding for roads, bridges and other projects. Or consider Martin Marietta Materials (MLM), which also specializes in the materials used in large construction projects. For exposure to makers of construction equipment, Caterpillar (CAT) and Deere (DE) are iconic names.

If you’d prefer a one-stop investment, Global X U.S. Infrastructure Development ETF (PAVE) is a solid choice. The fund invests in companies that stand to benefit from an increase in infrastructure activity in the United States.

Editor’s Note: Charles Sizemore is a contributing writer at Kiplinger’s Personal Finance magazine, .

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