Martin Marietta optimistic as it looks toward summer 2018

By |  May 17, 2018

Nye

Despite encountering a few challenges in the first quarter of the year, Martin Marietta maintains an optimistic short-term and long-term outlook for its primary construction end-use markets.

“We believe the United States is in the midst of a steady, multi-year construction recovery,” says Ward Nye, chairman, president and CEO of Martin Marietta. “Our leading positions in attractive, high-growth markets allow us to benefit from anticipated increased demand for both public and private construction activity in 2018 and beyond. Long term, we remain focused on elevating Martin Marietta from an aggregates industry leader to a globally recognized world-class organization, allowing us to further enhance shareholder value.”

Martin Marietta, which recently released its 2018 first-quarter results, expects infrastructure construction activity to benefit from the funding provided by the FAST Act as state Departments of Transportation and contractors address labor constraints and further regulatory reform emerges.

In addition, state and local initiatives that support infrastructure funding, including gas tax increases and other ballot initiatives, continue to gain overwhelming voter support, Martin Marietta says. These will play an expanded role in public-sector activity.

Third-party forecasts support increased infrastructure spending in 2018, as well – particularly for aggregate-intensive highways and streets.

“We remain confident that underlying market fundamentals, including positive employment and population trends across our geographic footprint, will stimulate continued growth in private construction activity and provide an impetus for additional infrastructure demand as the current broad-based recovery continues,” Nye says. “Underlying demand trends, coupled with continued pricing growth for all products and segments, reinforce our full-year 2018 outlook as construction activity accelerates during the balance of the year.”

Nonresidential construction is expected to increase in both the heavy industrial and commercial sectors for the next several years, Martin Marietta says. The company’s management expects new energy-related projects, particularly along the Gulf Coast, will continue to bid in 2018 with broader construction activity beginning in earnest in 2019 and beyond as permitting and final investment decisions are either made or approved.

According to Martin Marietta, residential construction is expected to grow as well, particularly in key Martin Marietta markets, driven by employment gains, historically low levels of construction activity over the previous years, low mortgage rates and higher lot development. Residential construction provides an impetus for future infrastructure and nonresidential activity.

The recent completion of the Bluegrass Materials acquisition bolsters Martin Marietta’s confidence further. The acquisition is the second largest in the company’s history.

“[It] strengthens our aggregates-led position in high-growth Southeastern and Mid-Atlantic regions, particularly in Georgia and Maryland, and is consistent with our long-term strategic growth plan,” Nye says.

“Working together, we will expeditiously deliver significant value from our enhanced business profile,” he adds.

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