2023 Construction Materials
Market Outlook

The 2022 operating year for construction materials (CM) truly began in November 2021 with the passage of the once-in-a-generation $1.2 trillion Infrastructure Investment and Jobs Act (IIJA), prompting euphoria among CM firms that stood to benefit from public works through 2026. Then economic headwinds hit.

In February 2022, inflation scaled to a 40-year high, and uncertainty began to spread. Driven by an overstimulated economy and geopolitical tensions, the Federal Reserve began a course of tightening. Throughout the year the Fed aimed for fiscal policy that would result in a “soft landing.” This mentality continued into 2023, with efforts to avoid sending the economy into a recession — the results remain to be seen.

For all the upheaval, CM firms remained resilient with the headline of “demand is strong” resonating through the sector. Much of the industry was able to counteract inflation through price increases, allowing earnings to remain consistent. As we look ahead to 2023, the threat of a recession still looms; but there are reasons to be optimistic for construction materials. IIJA funding and projects are coming online, providing opportunities to withstand a potential bear market. As single-family residential has slowed, demand for CM products has shifted to other end markets such as multifamily and commercial and industrial projects. Time will tell, but ultimately CM performance in 2023 hinges on five key elements