Bosses of some of Britain’s biggest companies have given Donald Trump’s surprise election win a cautious welcome amid hopes for a boost to infrastructure spending in the world’s biggest economy.
National Grid chief executive John Pettigrew and Geoff Drabble, boss at fellow FTSE 100 group Ashtead, cheered comments on infrastructure investment in Mr Trump’s victory speech as their US operations look set for a significant boost.
Ashtead was among the shares winners on Wednesday, enjoying a 12% rise, with drugs firms also higher on speculation that America’s Affordable Care Act – Obamacare – will face the axe.
But business leaders were quick to warn over protectionism, with fears that Mr Trump will press on with some of his more extreme policies despite striking a conciliatory tone in his speech.
Mr Pettigrew said Mr Trump’s comments were an “important signal”.
He added: “It’s still very early days obviously and we’ll need to see what happens as his presidency and his policies take shape.
“However we were encouraged to see him highlight infrastructure spending in his comments.”
The firm manages the UK’s electricity and gas networks, but has a substantial business in the US and is planning heavy investment on maintaining its gas and electricity pipes in Massachusetts, New York and Rhode Island.
He believes a policy shift under Mr Trump could see a drive to replace old assets.
Mr Drabble at Ashtead, which makes around 90% of group earnings from its US hire arm, said there was a “massive need for infrastructure investment in the US”.
“Trump has already said that he will look to the private sector to fund this and will offer significant tax breaks to them for doing so. So this plan will probably work because it all hangs together – there is a need for it, it will get passed swiftly, and now they need to think through the detail,” he said.
The benefits to pharmaceutical firms is less clear, but AstraZeneca chief executive Pascal Soriot is hopeful of “opportunities”.
On unveiling Astra’s latest trading update, he said: “We don’t know what the new administration in the US will look like. What we can reasonably expect is that the Affordable Care Act will be repealed or substantially modified, but it’s too early to tell what the new landscape will look like.”
Business groups in the UK sounded a note of caution.
Simon Walker, director general of the Institute of Directors (IoD), said: “During the US election, the benefits of free trade came under attack from both candidates, a development which has worried the business community.
“The IoD firmly believes that trade raises living standards across the world. In today’s globalised world, pulling up the drawbridge and turning inwards will only hurt citizens.”
Manufacturing group the EEF echoed fears over free trade.
Terry Scuoler, chief executive of the EEF, said: “Given the United States’ traditional role as a pioneer of free and fair trade, I hope the new president will ensure that he continues to champion this ethos.”
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