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Mid-year construction materials review
If the first-half of 2017 for the construction materials industry can be summed up in a word, it’s “uncertainty.” Keep Reading
Will the ‘Trump bump’ endure for the aggregate industry?
The first quarter of 2017 has been a remarkable one for the construction materials industry. Keep Reading
Q1 2017 construction materials update
Aggregate, asphalt and concrete will all be affected this year as the competitive reshuffling upstream calms. Keep Reading
Merger-and-acquisition activity continues in the aggregate industry
Merger-and-acquisition activity in the aggregate industry in the third quarter included several noteworthy transactions. Keep Reading
Market insights: Q1 2016 construction materials update
FMI's George Reddin and Scott Duncan provide an overview of construction materials for the first quarter of 2016. Keep Reading
Q1 2016 Economics Pulse: The year ahead
As we begin 2016, we cannot help but look back at what a remarkable year 2015 was for the construction materials industry. For many companies, 2015 marked their best year of financial performance since the Great Recession. In May, Summit Materials closed the industry’s first initial public offering in more than a decade. The largest deal in our industry’s history, LafargeHolcim, closed in October. A host of other mergers and acquisitions reshuffled the competitive slate in markets across the country. In addition, Congress and the president finally came together after nearly a decade to pass a long-term federal highway bill, the FAST Act. While rising interest rates, overheated housing markets, and international political instability provide some uncertainty, the construction materials industry is in a position of strength for the first time since the onset of the Great Recession seven years ago. As we look forward, three factors – new competitive dynamics in the United States; the recovering financial performance of both public firms and smaller, independent players; and the certainty… Keep Reading
Economics Pulse: Construction materials update
The Construction Materials sector has had an eventful 2015 marked by major transactions and the sector’s first initial public offering in over 15 years. Volumes continue to move up modestly as the housing sector continues its slow, but steady, recovery. Offsetting this good news was the 34th and soon-to-be 35th short-term extension of the federal highway bill. The ongoing series of short-term extensions leaves both the construction sector, states and municipalities in a cloud of uncertainty that has existed since the expiration of SAFETEA-LU in the fall of 2009. With Federal DOT funding now available until June 2016 and an election year on the horizon, the industry has increasing concern that a long-term bill at adequate funding levels will not be passed. With the ongoing lack of stable federal funding for highways, many states are taking a hard look at alternative methods to raise revenue. CM Index stock performance The following charts present the performance of publicly traded construction materials. FMI has created an index of these companies (CM Index)… Keep Reading
Economics Pulse: Construction materials update
The second quarter of 2015 was largely positive for the construction materials sector. Summit Materials is performing well in the public market place, stock performance has improved and volume indications are on the rise owing to the private sector. The one unknown that remains is whether Congress will produce legislation to address the long-term funding of our nation’s highway infrastructure. Summit Materials’ stock has performed very well, through the end of June. It’s up more than 20 percent in its first three months of trading. The company’s management team remains quite proactive in the acquisitions market and has a notable piece of the Holcim/Lafarge divestiture program with the purchase of seven terminals located along the Mississippi River. CM Index stock performance While the index remains behind the broader market over a 10-year period and one-year period, the CM Index companies have vastly outperformed the broader market over the past six months. The successful IPO of Summit Materials, approval of the Holcim/ Lafarge merger and belief that a highway bill would come out… Keep Reading
Economics Pulse: Construction materials update
The first quarter of 2015 brought four areas of interest to the construction materials sector: year-end earnings reports; the first initial public offering in the sector in more than a decade; continued anticipation of the industry’s merger of its two largest players; and the continued ineptitude of Congress to act on federal funding for highways. Public company performance The Construction Materials Index (CMI) in Figure 1 for a 10-year period, Figure 2 for the 12 months ended March 31, 2015, and Figure 3 for 2015 year-to-date shows the performance of CMI versus the market as a whole for the relative period. The CMI underperformed the market as a whole over the 10-year and 12-month periods, but significantly outperformed the overall market in the first quarter of 2015. The sector is coming off modest improvements in 2014 and a sense of improved optimism for 2015. Figure 4 presents select operating metrics for the CMI companies for the 12 months ended Dec. 31, 2014, while Figure 5 presents the composite EBIT and… Keep Reading
