The share price of Cimic Group Ltd [ASX:CIM] is up again today.
At the time of writing, the share price is trading strongly at $51.29, up $1.10 or 2.19%.
Cimic Group is a construction and infrastructure provider. It also services the mining sector.
What’s driving the share price higher?
If you make the daily commute, you’ll know how gridlocked our cities have become.
Australia’s population currently stands at just over 25 million. And it’s growing by 1.6% a year…that’s faster than any other developed country!
We’re adding millions faster than ever before. And our cities are straining under the weight.
No wonder the government is making infrastructure spending a high priority. They’re splashing billions on it.
All that’s positive for Cimic Group. That’s if their recent update can be any guide. First quarter results this month revealed revenues were well up. And work in hand stands at a staggering $36.9 billion.
What now for Cimic Group shares?
As always, let the stock chart be your guide.
Should the share price break higher and start trading above $51.80 or so, then half-year results due in August are likely to reveal continued strong revenue growth. Let’s wait and see.
And note that despite the massive spend on infrastructure, current spending still remains below the long-term average. So don’t expect this trend to stop in its tracks any time soon.
Not to mention, the Coalition has made a pre-election budget pledge of a further $100 billion to be spent on road and rail improvements.
With the massive spending ongoing, all this is bullish long-term for infrastructure providers like Cimic.
And with almost $37 billion of work in hand, none of that suggests a collapse anytime soon.
For Money Morning
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