TRG | The Bottom Line – 6/24

It’s a toss-up (photo credit from a recent TRGer's wedding!). Can the Fed “rescue” the economy from a hard landing or will Adam Smith’s “invisible hand” prevail? As Q2’22 wraps up, TRG is deep into our quarterly “survey season,” tapping our valued industry contacts across the construction and industrial value chain to better assess current trends. Heavy materials producers across the U.S. have not seen an appreciable change in demand trends, and mid-year pricing actions have largely been successful. On the other hand, a large, private fencing manufacturer has seen softening in demand from the Midatlantic to New England starting in April/May, while business in the Carolinas to date has remained “steady.” Another industry contact shared that a major national homebuilder has tapped the breaks on land purchases in the DFW market. While the majority of contacts have visibility through 2022, 2023 is less clear for a certain subset. We are seeing early signs of “haves” and “have nots” as the market slows, with the Southeast and Southwest relatively outperforming. Consensus from the majority of industry contacts has been that the Fed has been “late and wrong.”