6 months ago
Jefferies list 10 themes in European infrastructure
Investing.com -- Jefferies has identified 10 themes shaping European infrastructure, highlighting areas of momentum and weakness across the sector.
The brokerage noted that construction is showing the strongest growth, driven by demand for data centers and power markets, while towers have lagged as higher U.S. yields and concerns about customer consolidation weigh on sentiment.
Data centers and artificial intelligence remain at the forefront of U.S. nonresidential construction, with executives pointing to both booming demand and increasing project complexity.
Hochtief (ETR:HOTG) CEO Juan Santamaria said larger and more complex projects are benefiting major contractors.
Meanwhile, U.S. infrastructure growth continues to be supported by the Infrastructure Investment and Jobs Act, with AECOM’s Troy Rudd emphasizing that only 36% of targeted funding has been spent so far, leaving a substantial runway for further investment.
In Europe, French motorways are moving closer to renewal, with Vinci (EPA:SGEF) CEO Pierre Anjolras saying the government now has a framework to proceed with concession tenders.
U.S. managed lanes are also gaining traction, with Ferrovial CEO Ignacio Madridejos highlighting the positive impact of TIFIA expansion and streamlined environmental permitting.
Energy remains a long-term growth driver despite short-term fluctuations. Vinci Energies CEO Arnaud Grison cited electrification, the energy transition, and digitalization as structural tailwinds.
In Germany, Jefferies expects private investment to lead near-term momentum, though SPIE’s Gauthier Louette noted it may take time to translate into orders.
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The U.K. infrastructure outlook remains positive, particularly in power, with Balfour Beatty (OTC:BAFYY) CEO Leo Quinn describing growth in that segment as “astonishing.”
Telecom (BCBA:TECO2m) consolidation is emerging as a key theme in France. Orange CEO Christel Heydemann confirmed preliminary discussions on potential deals, while Jefferies said in-market consolidation “makes sense.”
In Africa, investment in telecom towers is accelerating, with Helios Towers CEO Tom Greenwood describing a “healthy environment” supported by growing tenancy pipelines.
Finally, European traffic volumes continue to face headwinds. Lufthansa CEO Carsten Spohr said softer North Atlantic growth is spilling over into weaker connecting traffic in short-haul routes, underscoring persistent pockets of weakness in the transport sector.
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