TRG | The Bottom Line – 1-17

This week wrapped up  TRG’s survey season with all eyes on expectations for how 2025 will play out. Feedback was cautiously optimistic as everyone is trying to figure out how resi and non-res markets will play out. Most notable perhaps is feedback from a flooring industry contact and other related commercial end market contacts that non-res activity picked up meaningfully in December. While healthcare and education continue to be strong, the biggest change is that office R&R demand has picked up meaningfully, which our contact attributes to more office remodels and large companies pushing return to office (RTO) to a greater degree. While there are few quantitative data points yet that would indicate a return to growth (rates aren’t materially lower), early feedback across a wide range of contacts has been incrementally positive. This theme was highlighted across TRG’s “Q4’24 Contractor and Surety Survey,” “Q4’24 Resi & Non-Res Product Survey,” as well as individual notes. If this theme continues to gain momentum in early 2025 we believe companies that are exposed to office R&R would see an outsized benefit. This includes Interface (TILE), HNI Corp (HNI), Steelcase (SCS), Armstrong World (AWI), and GMS (GMS).