TRG | The Bottom Line – 10/4

This week TRG published our Q3’24 Heavy Materials & Infrastructure Survey after talking to industry participants about how the quarter shaped up and more importantly what to expect going forward. In regard to Q3, weather once again got in the way of activity, which was already pent up after a weather stricken Q2. For Q3’24, consistent themes we expect to hear from companies include 1) lost volumes, 2) higher costs related to business disruptions and operational inefficiencies, and 3) missed workdays hampering the ability to complete or start new jobs. Hurricane Helene made landfall at the tail end of Q3 and will have a larger impact to early Q4. While volumes may be lousy in the short term, the aggregate pricing environment remains solid despite tepid volumes. Cement pricing trends varied by market, with pricing closer to ports (i.e., south/central TX) seeing less stability in pricing versus more inland cement markets. Looking forward, feedback from the field continues to point to growth and upcoming work to be started in 2025 from data centers, stadiums, industrial facilities (including batteries and advanced technologies), airports, healthcare, and various renewable projects. Residential activity is slow to recover but received a much-needed rate cut to start the upcycle of new homes and existing turnover, but this will be a longer tailwind to play out. Public activity continues to provide the best outlook, with ~80% of IIJA funds over the life of the bill still to be spent and state spending remaining in a health place despite budgets being mixed.