The border wall with Mexico could slow U.S. economic growth. But as Fred Katayama reports, some sectors will benefit, and investors are driving up those stocks.
The border wall with Mexico that President Trump has ordered could cost a lot more than the $8 billion figure he cites. Senate Republican leader Mitch McConnell said Thursday Congress is moving ahead with a wall that would cost up to $15 billion. Wall Street research firm Bernstein estimates the tab at up to $25 billion. Whatever the cost, the wall, assuming it does block illegal immigrants from coming into the country, could make it harder for companies to find replacement labor, thereby driving up wages and prices. Brookings Institution senior fellow Gary Burtless says it could hurt consumers and crimp U.S. economic growth. SOUNDBITE: GARY BURTLESS, SENIOR FELLOW, ECONOMIC STUDIES, BROOKINGS INSTITUTION (ENGLISH) SAYING: "Total economy will grow a little more slowly. The incomes of people who compete with illegal immigrants should climb a little faster, and the rest of us will pay higher prices for things like fruits and vegetables, inexpensive motel stays, other things produced by industries where illegal immigrants are an important source of labor." But some industries stand to make more money. U.S. Bank senior portfolio manager Eric Wiegand: SOUNDBITE: ERIC WIEGAND, SENIOR PORTFOLIO MANAGER, U.S. BANK (ENGLISH) SAYING: "Areas that would benefit would certainly be in the construction, materials areas, as well as construction equipment. Steel manufacturers would tend to be beneficiaries. We've seen a groundswell of interest in those areas post the election." Among them: construction equipment maker, Caterpillar, contractor Granite Construction, and aggregates producers Martin Marietta Materials and Vulcan Materials . Those stocks have gained more than 13 percent since the election. One possibly unintended side-effect: The wall could even benefit a Mexican company, the cement giant, Cemex, which also has a huge subsidiary north of the border in Houston.