TRG | The Bottom Line – 4/14

TRG’s Q1’23 Heavy Materials Survey published this past week focuses on key aggregate, concrete, asphalt and cement volume and pricing trends throughout Q1’23. “Volatility” is the key word…and things just aren’t that bad. TRG still expects pricing momentum for aggregates by and large to carry into 2023, although not at the same magnitude as 2022. Expectations are for pricing to be up low teens on a percentage basis. While the year started off with solid cement inventories in the field, we see demand tightening as the spring season progresses (earlier than we had anticipated). With that in mind, this should be supportive for cement pricing at least through the summer construction season. Respondents to our Q1’23 Equipment Rental Survey also pointed to strong activity and mostly positive customer sentiment. High demand is soaking up larger fleet sizes, with rates improving in Q1 and more expected for Q2. With that in mind, high utilization and inflation is allowing rental companies to raise rates. Fleet in tight supply, and demand still exceeds supply. Rental companies have been placing orders earlier than usual, and must continue to do so. The larger companies are in an advantaged position to secure new units. Used equipment pricing remains strong, given tight supply and robust end market activity.