Pit & Quarry, February 2015
BY GEORGE REDDIN Construction materials update L ast year proved to be a year of mixed results for the construction materials sector Production volumes increased in 2014 but not at the pace that many expected Sales increased but profit margins struggled to show improvement Stock prices for the sectors public companies had an impressive start to the year but lagged the Dow Jones Industrial Average and S P 500 for the year The sector benefited from continued increases in both residential and nonresidential construction spending At the same time federal spending on transportation continued its nearly f lat trajectory and received only short term funding commitments The sector is poised for significant growth however that will have to wait until the funding challenges at both the federal and state levels can be resolved The Construction Materials Index CMI shown here presents the stock performance of the sectors publicly traded stocks over a 10 year period Figure 1 and for 2014 Figure 2 As shown the sector was one of Wall Streets darlings during the residential construction boom 2004 2007 far outpacing the performance of the market as a whole The collapse of residential construction the expiration of the SAFETEA LU transportation bill with no reauthorization in sight and the overall collapse of the financial markets in the fall of 2008 caused the sector to underperform the overall market Figure 2 shows the performance for the CMI in 2014 As shown the sector had a strong first half of the year when compared to the overall market The Martin Marietta and Texas In ECONOMICS S P Capital IQ as of Dec 31 2014 S P Capital IQ as of Dec 31 2014 FMI Research 4Q Outlook 46 PIT QUARRY February 2015 www pitandquarry com
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