An area of interest for future growth is, obviously, the rebuilding of the infrastructure. More and more demands are compelling federal, state, and local governments to build new roads, improve water and sewer systems, replace obsolete bridges, and so on. While such construction activity has not been included in lists of growth industries in the past, public policy is focusing increasing attention on it, and there will be continued growth in this area not only in the U.S. but in other parts of the world, such as the Middle East, Eastern Europe, and Russia. Companies such as Caterpillar Corp. (the leading supplier of earth moving equipment), Fluor Corp., and Morris Knudsen (engineering and construction companies) could be big beneficiaries of the growth in this area. Investors should not overlook the obvious: public construction of all kinds is a way of providing work for the unemployed masses of the U.S. and other nations, particularly those with limited skills and training. This may be one of the fastest growing sectors of the economy of this and other nations for many years to come as, hopefully, spending on defense will moderate and governments can begin to direct additional funds to their respective domestic scenes.
In addition to the growth areas enumerated above, there are certainly growth companies in industries that are not necessarily growth industries. Such an example can be found in the food sector, Consumption of food itself is not really in a growth mode, except as the population continues to increase. But, in recent years, new trends have emerged in food consumption. The trend toward two people in a family working is a relatively new social more for the American people. A strong beneficiary of this trend has been the fast food and restaurant business, with McDonald’s as the prime example. The undisputed leader and innovator in the fast food business, this company has expanded and prospered, and can be expected to continue this trend into the next century. In the restaurant business, and catering to the family, General Mills has performed an outstanding job in creating chains of Red Lobster and Olive Garden restaurants. Certainly, these companies should be included as growth companies.
Other examples are companies that have taken a share of the market in the merchandising industry. The success of, say, Gap. Inc., Home Depot, The Limited, Walt-Mart Stores, Nike, Tandy, and others is directly related to the ability of these companies to give the public what it wants and needs, at a reasonable cost and with convenience. Not all of these companies will remain in a growth mode (fashion could change, stiff competition could occur, etc.), but investors can profit by observing consumer attitudes and companies that are meeting consumer demands.
A list of quality growth companies whose stock can be held by long-term investors with a high heart could go on and on. Although I should not belabor the matter, among specialty companies that fit a special need could be Boeing, Coca-Cola, International Flavors & Fragrances, Pioneer Hi Bred, Procter & Gamble, General Re, and others. The main point that I make is that growth companies do not necessarily have to be companies in the “glamor” growth industries. They can be companies that have a special niche in their own industries or that offer products or services in some special, demand-providing way.