Construction Materials – Favorable Economics and Selective Buyers
If headlines are any metric, there are ample reasons to be concerned about an emerging recession in the United States. In August, the two-year treasury yield exceeded the ten-year yield (often an early sign of recession), and in early September tariffs on more than $112 billion in Chinese goods took effect. Meanwhile, housing prices and starts appear to have leveled off and even declined somewhat versus prior years. Each of these developments are driving dire headlines in the financial media and increased uncertainty in a growth cycle that is already historic in its duration.
Despite recent developments, the performance of public construction materials companies remains positive. Most of FMI’s Construction Materials Index (CMI) firms reported gains in both volume and pricing in the United States during the second quarter, with wet weather being one sticking point for many producers.
