- Title: Trump's wall could crimp economic growth - analyst
- Date: 26th January 2017
- Summary: WASHINGTON, D.C., UNITED STATES (JANUARY 26, 2017) (REUTERS) (SOUNDBITE) (English) BROOKINGS INSTITUTION SENIOR FELLOW OF ECONOMIC STUDIES, GARY BURTLESS, 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, other things produced by industries where illegal immigrants are an important source of labor."
- Embargoed: 9th February 2017 20:28
- Keywords: President Donald Trump Mexico U.S. Bank Eric Wiegand Caterpillar Martin Marietta Materials Vulcan Materials Granite Construction Cemex wall border immigration
- Location: CIUDAD JUAREZ, CHIHUAHUA, MEXICO / WASHINGTON, D.C., UNITED STATES / INTERNET
- City: CIUDAD JUAREZ, CHIHUAHUA, MEXICO / WASHINGTON, D.C., UNITED STATES / INTERNET
- Country: USA
- Topics: Economic Events
- Reuters ID: LVA00560PYWZX
- Aspect Ratio: 16:9
- Story Text: A border wall with Mexico that U.S. President Donald Trump has ordered looks like it could cost a lot more than the $8 billion figure he cites and it might decrease American economic growth, an analyst told Reuters on Thursday (January 26).
Senate Republican leader Mitch McConnell said Congress is moving ahead with a wall that would cost up to $15 billion, while 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, said Gary Burtless, a Brookings Institution senior fellow.
"Total economy will grow a little more slowly," Burtless said.
"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.
"Areas that would benefit would certainly be in the construction, materials areas, as well as construction equipment," said U.S. Bank senior portfolio manager Eric Wiegand.
"Steel manufacturers would tend to be beneficiaries. We've seen a groundswell of interest in those areas post the election. They've tended to lead the markets higher."
Among them: construction equipment maker, Caterpillar; aggregates producers Martin Marietta Materials and Vulcan Materials; and construction contractor Granite Construction. 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.
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