Profiting from UK infrastructure boom

Maintaining and improving Britain's infrastructure is an expensive business. Late last year, the government's National Infrastructure Plan 2014 outlined £466 billion of spending on major infrastructure projects including £55 billion in 2015/16 alone.

Within the pipeline of major projects set out by the former coalition was £15 billion of taxpayers' money for upgrading, widening and laying new roads. Many times more is set aside for the High Speed 2 (HS2) rail link between London and the Midlands. Construction could start as early as 2017.

Crossrail, linking Shenfield in the east with Reading in the west via London, should begin running services in 2018. The £15 billion scheme will stop at Heathrow where the row over a third runway rumbles on. A decision is expected this summer, and whether it's additional runway capacity at Heathrow, or a new stretch of concrete for Gatwick, someone will need to build both the runway and the infrastructure needed to support it.

A Conservative majority at the recent general election also makes it more likely, although not 100% certain, that major infrastructure projects will go ahead. Of course, spending on the NHS and schools will always get the popular vote, but more controversial schemes which might have struggled had the Tories remained in fragile coalition, will be easier to progress.

That means a massive payday for the army of British companies employed to build and repair the country's roads, railways and schools, and to develop energy, communications and water facilities.

Hill & Smith makes crash barriers, metal gantries and road-safety signs, so benefits enormously from roadbuilding projects. So does Breedon Aggregates. Stobart Group owns the newly revamped Southend Airport, while Waterman Group acts as consultant. APC Technology, meanwhile, supplies energy efficient LED lighting to Network rail, and CityFibre provides fibre infrastructure to mid-sized cities and major towns across the UK.

These are some of the stockmarket-listed firms already generating profits from the infrastructure boom. But there are thousands of smaller companies keeping the existing system fit for purpose and driving further change for the better. Political certainty underpins the outlook.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.