US further contributes to resources boom

Ageing infrastructure needs attention

By Vishal Teckchandani
Wed 30 Jul 2008

The United States will carry the resources boom further due to its infrastructure replacement needs and demand for LNG, a top economist has said.

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The United States will further fuel the resources boom as the country's ageing roads, bridges and power stations need to be replaced, a top economist has said.

"The US economy needs steel," OECD deputy director of financial and enterprise affairs, Adrian Blundell-Wignall said.

"It's got to have liquefied natural gas (LNG) platforms, it's got to have new bridges and roads and power stations. The whole of US infrastructure needs to be redone."

Last week, the US Government passed legislation to spend US$25 billion on improving the country's roads, after an investigation revealed 70,000 structurally deficient bridges across the nation.

The Minneapolis bridge on Interstate 35W collapsed last August, killing 13 people and injuring 145.

The US also needs more LNG platforms to secure the energy and heating demands of its consumers, which may spur higher demand and profits for listed companies such as Oil Search and Origin Energy, Blundell-Wignall said.

Supplies of LNG for the US may surge 36 per cent in 2009, according to Texas-based natural gas research firm, Waterborne Energy.

The demand for resources had spurred record production of commodities mined by BHP Billiton, for the three months to July 30. The company is tipped to reveal record profits in its annual report.

Blundell-Wignall was a former Reserve Bank of Australia (RBA) economist.

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