to utilities , it would increase utility capital budgets by 50 % -100 %.
“ I think it ’ s reasonable to assume that if Biden were to win , and especially if the Senate is Democratic , that there could be some substantial increase in federal support for utility spending ,” Konolige said .
Democrats would intend to support renewable energy and reduce fossil fuel use , as evidenced by the Biden campaign ’ s emphasis on ending oil and gas subsidies in the U . S . federal budget . If this net capital is reinvested in renewables , earnings for utilities can potentially increase , Konolige said . He also suggested utilities ’ capital budgets could see a boost from support for electric transmission . broadband opportunities . This boost could also benefit specialty contractors working to deploy 5G networks in underserved markets .
Defense is also an area most “ larger diversified engineering construction companies ” are active in , Levine said , but a Biden administration would likely shift funding away from defense and toward infrastructure , which would impact government-focused defense contractors . The U . S . is at low levels of defense spending however , at about 3 % of the GDP , so “ we don ’ t see a lot of downside ... based on where we already are today ,” Levine said .
Other industrial services including telecom and defense will see movement under a Biden administration , said BI industrial services analyst Scott Levine . He suggests 5G has “ taken off as a catalyst for increased spending ,” and a Biden administration supports adding $ 20 billion to fund rural
24 DITCHMEN • NOVEMBER 2020