The predicted boom in construction stocks under President Donald Trump is turning into a bust.

Trump promised to deliver a $1 trillion infrastructure early in his first year but is now talking about trying to get one through Congress by year-end, with concern it may be pushed into 2018. Waning optimism is taking a toll on builders such as Fluor Corp. and Chicago Bridge & Iron Co., which already have been hit by cost overruns on major projects.

“Clearly we had a pop in all these names with the election,” said Brent Thielman, a construction industry analyst with D.A. Davidson & Co. “As investors are digesting that this is going to take more time -- if it happens at all -- we’re sort of back to the reality of the market.”

Trump abandoned a plan for an infrastructure advisory group this month in the wake of his controversial comments on the violence in Charlottesville, Virginia. While top economic adviser Gary Cohn said the administration still hopes to get an infrastructure plan approved this year, Congress must first tackle the debt ceiling and an as-yet-unwritten tax bill before turning its attention to America’s crumbling roads and bridges.

“Delivering U.S. infrastructure projects will be challenging,” said Sonia Baldeira, an analyst at Bloomberg Intelligence, after Trump scrapped plans for the council.

Stock prices for all 18 of the largest U.S. engineering and construction firms increased in the weeks following Trump’s surprise win in November, driven by investor expectations of an infrastructure boom and tax cuts. From Nov. 8 through the end of 2016, Fluor jumped 18 percent and CBI climbed 13 percent. Since Jan. 1, however, shares of Fluor and CBI have fallen 28 percent and 65 percent, respectively.

During the energy boom in 2014, Fluor, the largest publicly traded construction company by revenue, and CBI signed fixed-priced contracts to build electricity, petrochemical and natural gas processing plants. Now, they’re finding that payments aren’t covering expenses inflated by snags on equipment, worker productivity and poor original estimates. Fixed-price contracts have higher profit potential for the builder but carry more risk than cost-reimbursable projects.

“You have highly visible fixed-price contract charges taken by many companies, primarily CBI and Fluor,” said Mike Dudas, an analyst with Vertical Research Partners. “That certainly has given a negative connotation to the group in general.”

Spending Slows

Non-residential construction spending increased 0.6 percent in the first six months of this year compared with a year ago, held back by a 5.4 percent drop in public spending, according to Commerce Department data. Total spending for manufacturing facilities, power plants, highways, water and waste-water projects have dropped this year. A few bright spots are gains of more than 10 percent for office and commercial construction.

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