How construction materials firms are faring versus the ‘general market’

Over the past 75 days, FMI Capital Advisors’ Construction Materials Index (CMI)* has outperformed the “general market” by more than 15 percent. This could be due to many factors, potentially centering around the fact that construction materials has a perceived stability in the face of macroeconomic uncertainty.

Dedicated funding with the Infrastructure Investment & Jobs Act, strong growth drivers, limited exposure to the banking crisis and demonstrated pricing power all paint an optimistic picture for the sector. This stellar performance remains promising despite the fact that production for U.S. construction aggregates has been down year over year in recent quarters.

With the core operating season upon us, it will be interesting to see how producers fare through the second half of 2023 and how earnings are affected by a potential slowdown in the residential segment.

*The CMI is a proprietary index of 18 publicly traded companies that operate in the construction materials space.