Topic of the quarter. While the forthcoming election has created a significant level of uncertainty, the direction of travel on infrastructure spend seems certain. Both main parties have promised a significant increase. The Conservatives (currently favourite to win) have promised a £20bn p.a. increase to £67bn. Labour has promised to more than double net capital spending to £102bn, which would make the UK’s capital spending amongst the highest in the world. In addition, CP6 (which promises a 25% increase in renewal and maintenance spend in rail) and HS2 (where a leaked document has supported the project continuing) should move from early stages into more meaningful spend. Latest estimates detail HS2 will cost £88bn, with the pressure upwards. We make no predictions as to the election winner or the exact level of infrastructure spend that will eventually occur, but there is mounting evidence that we are about to see significantly improved market conditions for those companies involved in UK infrastructure. Of the companies we follow, we highlight Renew (perfectly positioned to see the benefit of increased renewal and maintenance spend in rail) and Van Elle (which we expect to see both the benefit of higher rail spend and the competition being lured off onto HS2). There is likely another round of downbeat trading statements to clear before spending filters through to improved company trading (excluding Renew whose recent results impressed), but the outlook is brightening and valuations are not stretched.