TRG | The Bottom Line – 4/7

TRG last week wrapped up our 2023 C&I Conference and we’re also in the midst of Q1’23 “survey season.” We continue to receive feedback that non-res construction remains strong and go-forward indicators are equally positive. The main concerns we have consistently received from industry contacts over the past ~9 months has been centered on project cancellation (which has been very low to non-existent) and higher rates reducing owner willingness to pursue new projects (minimal impact thus far). We will continue to monitor these two factors, but we would also add that mega projects continue to rule the day, offsetting any lingering softness in light commercial work. Sizable backlogs and the quantity of large projects give us confidence on 2023 non-res and public-funded (e.g., roadwork) activity being strong. As one C&I Conference presenter quipped on Samsung’s build out in central Texas, “They are basically building a new city with an estimated 45,000 new jobs created.” We believe all of this supports our bullish stance on equipment rental, aggregate & cement producers, distributors, equipment manufacturers, contractors, and service providers.