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Aecon Group Inc T.ARE

Alternate Symbol(s):  AEGXF

Aecon Group Inc. is a Canada-based construction and infrastructure development company. The Company delivers integrated solutions to private and public sector clients throughout Canada and other countries. It operates through two segments within the infrastructure development industry: Construction and Concessions. Its Construction segment includes all aspects of the construction of both public and private infrastructure, primarily in Canada, and internationally and focuses primarily on the civil infrastructure, urban transportation solutions, nuclear power infrastructure, utility infrastructure and industrial infrastructure. Its Concessions segment include the development, financing, build and operation of construction projects primarily by way of public-private partnership contract structures, as well as integrating the services of all project participants. The Company’s projects include Annacis Water Supply Tunnel, Bell Canada Gigabit Fiber Service, Finch West LRT, and others.


TSX:ARE - Post by User

Post by Gabrielon Aug 02, 2024 6:16am
184 Views
Post# 36160033

Recession means increased public works spending

Recession means increased public works spending

There is material documentation evidence that 1$ spent by governments on infrastructure generates over 1.5$ in economic activity, more so when infrastructure projects are cost-effective (for instance the more users, the higher the benefits; also lesser construction, operations and maintenance costs improve the project rates of return) and the literature indicates that this is more so during a recession.

During the great depression of the 30s (Roosevelt's New Deal investment program) and the great recession of 2008-2009 and COVID, governments spent heavily on public works in accordance with Keynesian economics to support employment and accelerate economic recovery. It has always helped.

The effectiveness of government spending on anything (like a grant to a battery manufacturer) depends on the size of fiscal multipliers or how much economic activity is generated from every dollar spent.  

Substantial documentation estimates such multipliers. Overall, the largest multipliers are found to be associated with public investments, as opposed to other types of spending. The size of multipliers is sensitive to economic conditions. During recessions, public works spending offers higher multipliers.
This is based on a literature review of over 100 academic papers summarized in the link below. The full synthesis is also below. Good reading.

All this to say that should we hit a recession, more projects will come along to stir economic activity. All economic advisors read the same papers...

https://blogs.worldbank.org/en/ppps/effectiveness-infrastructure-investment-fiscal-stimulus-what-weve-learned

https://documents1.worldbank.org/curated/en/178841633526651703/pdf/What-Have-We-Learned-about-the-Effectiveness-of-Infrastructure-Investment-as-a-Fiscal-Stimulus-A-Literature-Review.pdf

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