Business didn’t go according to plan in 2024 for many of the nation’s aggregate producers.
As such, U.S. crushed stone, sand and gravel volumes will be down for the second year in a row, with adverse weather impacting stretches of the production season in some regions.
Still, producers, by and large, continued on the value-over-volume path they navigated in 2023. Producers made further gains in aggregate pricing throughout this year, and they largely experienced good demand for materials in construction’s various markets.
“The current economic environment is constructive for our businesses,” says Michael Haack, president and CEO of Eagle Materials. “Employment is strong, recent inflation data should support a more accommodative monetary environment, spending from the Infrastructure Investment & Jobs Act (IIJA) is still in the beginning phases, and housing supply remains chronically short because of decade-long production deficits.”
Continued demand for infrastructure sustained many producers through 2024.
“If you look at the macroeconomics, this year is overall a pretty good year,” says Cody Ladd, president and COO at Kraemer Mining & Materials. “You’ve got a substantial amount of infrastructure funding. The IIJA is still up and running. At the end of the day, as long as we have really strong infrastructure funding as an industry, I think we can feel really confident in the future.”
Kyle Larkin, president and CEO of Granite Construction, has a similar view of the infrastructure market right now.
“We believe we are still in the early stages of experiencing the benefits from the federal infrastructure bill that should continue to support the public market for years to come,” Larkin says.
What top producers are saying
Still, what could have been in 2024 for some producers if not for the weather?
Several public producers cited weather as a factor impacting their second and third quarters. Count Vulcan Materials and Martin Marietta – the nation’s top two producers – among them.
The CEOs of both companies, however, say they strategically overcame the weather to post a variety of gains in their businesses.
“While significant weather disruptions have impacted construction activity through the first nine months of the year, overall demand fundamentals continue to underpin long-term growth,” says Tom Hill, chairman and CEO at Vulcan. “The pricing environment remains positive, and we continue to execute well.”
Ward Nye, chairman and CEO of Martin Marietta, also touched on weather during a recent market assessment.
“In the third quarter, our team achieved record quarterly aggregates gross profit per ton, record third-quarter cash flows from operations, record third-quarter revenues and gross profit in our magnesia specialties business, and the best year-to-date safety performance in our company’s history,” Nye says. “While these achievements demonstrate our continued success managing those factors we can control, well-chronicled weather-related events had major impacts on our third-quarter business results.
“Significant July precipitation, together with Tropical Storm Debby in North Carolina, Hurricane Beryl in Texas and Hurricane Helene across much of our Southeast footprint, all occurred during the quarter,” he adds.
CRH, the nation’s No. 1 sand and gravel producer and No. 3 crushed stone producer, presented a similar view as the company emerged from its third quarter.
“Our third-quarter results represent another strong performance, with further growth in sales, profits and margins,” says Albert Manifold, chief executive at CRH. “Despite contending with adverse weather in the quarter, our differentiated solutions strategy continues to deliver industry-leading performance, while the strength of our balance sheet, combined with our disciplined approach to capital allocation, leaves us well positioned to capitalize on the growth and value creation opportunities that lie ahead.”
