![Says Martin Marietta’s Ward Nye: “Aggregate’s pricing fundamentals remain attractive … underscoring the advantages of our value-over-volume [strategy].” Photo: izusek/E+/Getty Images](https://stage.pitandquarry.com/wp-content/uploads/2024/05/PQ0624_GettyImages-1311414505R.jpg)
The resurgence of M&A activity is particularly notable in the construction materials industry, where clearer economic signals compared to the previous year have provided companies with the confidence to pursue growth through acquisitions.
The ability to increase prices for aggregates, hot mix asphalt and ready-mixed concrete to offset rising costs has played a crucial role in boosting earnings and providing the capital necessary to expand through M&A. Strategic pricing adjustments and the availability of capital have encouraged companies to actively seek out bolt-on acquisitions that complement their growth strategies.
“Our bolt-on investments continue to be an important component of growth,” says Fernando González, CEO of Cemex, during the company’s first-quarter earnings call.
Conclusion
While facing challenges from economic fluctuations, weather impacts, market shifts and regulatory changes, construction materials industry leaders remain cautiously optimistic.
Their strategies to manage pricing, adapt to new market opportunities and leverage government funding are crucial for navigating the current economic landscape and positioning their companies for future growth. These nuanced strategies reflect a deep understanding of the complex interplay between macroeconomic factors and industry-specific dynamics, ensuring that industry companies not only survive, but thrive in changing times.
This proactive and forward-looking approach is likely to continue to drive the industry’s consolidation and expansion in the foreseeable future.
George Reddin, Rob Mineo and Evan Coughlin are with FMI Capital Advisors.
