Construction Companies Levered to Hydrocarbon Transportation See Secular Demand Growth: North American Energy Boom Reveals Infrastructure Needs

Wall Street Transcript

67 WALL STREET, New York - April 12, 2013 - The Wall Street Transcript has just published its Building Materials, Construction and Housing Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: North American Electrical Transmission, Infrastructure Build in Emerging Markets, Strong End Markets for Building Products, Energy infrastructure companies, Infrastructure spending

Companies include: Fluor Corporation (FLR), Jacobs Engineering Group, Inc. (JEC), Chicago Bridge & Iron Company (CBI), Quanta Services Inc. (PWR), Primoris Services Corporation (PRIM) and many more.

In the following excerpt from the Building Materials, Construction and Housing Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Let's talk a little bit more about the shale industry in the United States. Is it fairly geographically concentrated or do you see it expanding throughout the construction and engineering space?

Ms. Afzal: The shales themselves are fairly geographically contained, but the pipelines are a little more widespread, because you have got new points of origination of crude oil, NGL and natural gas, which are of course in the Marcellus area, and in of course the Bakken area. Then you have the oil sands potentially also leading to some pipeline activity in Canada.

Additionally, the Gulf Coast and several other basins are oriented towards oil and NGL. All these resources have to get from the point of origination to other points, so the pipeline activity is a little more widespread in terms of opportunities. When you are looking at the petrochemicals industry and the opportunities there, they are definitely more centered around the Gulf Coast. There is some opportunity potentially near the Marcellus itself, but most of the projects we are seeing coming up are really centered around the Gulf Coast area. We don't see that expanding geographically, but we still see it as a tremendous opportunity.

TWST: The other area you mentioned is nonresidential spending. What are the specific subsectors you are seeing benefit from that growth?

Ms. Afzal: Obviously, we follow something called ABI Index, which is a very popular index. The ABI is the Architecture Billings Index, a monthly index published by American Institute of Architects. They publish it every month. The key category within that where we see the real growth right now is private commercial and particularly heavy commercial. We see that leading in terms of what is coming back. The specific places we see the most growth right now are the larger cities like New York and Boston. These are the markets that are showing the strongest trends right now.

In terms of the companies, the ones that do the front-end work, the very early work on the architectural side and the engineering side, are indicating...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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