Coming off a year in which contractors, manufacturers and dealers faced significant headwinds, one might think there would be nerves going into 2025 that those challenges could dominate the new year.
On the contrary, there is seemingly nothing but excitement for what 2025 holds. This is due to the strong performances many companies found in 2024 in the face of high interest rates, stubborn inflation, inclement weather and the uncertainty leading up to this year’s presidential election.
It should also be noted that many of these economic and business headwinds improved in the second half of the year. These changing tides bolstered confidence among construction industry stakeholders and left them with a much better taste in their mouth than in the first half of 2024.
Now, stagnant businesses are looking forward to growth in 2025, and thriving businesses are looking forward to, hopefully, another strong year.
“Overall company performance is trending flat [compared to] 2023,” says Jason Waddell, group manager of aggregate operations at Jones Bros. Construction in Nashville. “The aggregates segment has seen growth in low double digits, and we anticipate growth to continue in 2025.”
Waddell adds that political clarity has shifted some expectations within the marketplace. He still anticipates moderate growth in 2025.
“We see the aggregates segment of our business continuing to grow, and we predict mid-single-digit growth in 2025,” Waddell says. “We have been able to capture similar price increases versus prior years.”
Waddell points to greenfield opportunities and funding from the Infrastructure Investment & Jobs Act as potential boons.
“As companies like ours look for strategic growth, we are monitoring the environmental and regulatory aspects for more streamlined processes as it relates to greenfield opportunities,” Waddell says. “I expect investment on infrastructure-related items to continue as the nation seeks avenues to expand existing roads and bridges and private enterprise looks to grow on the residential/commercial sides of our industry.”
National producers
Beyond the local contractor level, large national producers are optimistic about 2025.
Companies like Martin Marietta and Vulcan Materials had to contend with uncharacteristically wet weather and declining sales volumes throughout 2024. Add on a stronger-than-normal hurricane season this summer, and this year was a trying one for public companies.
Moving away from those challenges, and with a slate of opportunities in the infrastructure sector, large producers are welcoming 2025 with open arms.
“Looking ahead to 2025 and beyond, we expect to benefit from record levels of federal and state investments in highways, streets and bridges,” says Ward Nye, chairman and CEO of Martin Marietta. “Additionally, reshoring and the buildout of artificial intelligence infrastructure should provide steady growth in these aggregates-intensive end markets for years to come.
“Further,” Nye adds, “although higher interest rates continue to affect residential construction activity, we are encouraged by recent Federal Reserve policy actions and the likelihood of more interest rate cuts later this year, which should support a recovery in housing and, subsequently, light nonresidential construction activity.”
To counteract lower volumes throughout 2024, producers have, by and large, increased materials prices. Looking to 2025, Vulcan Materials expects more of the same. Additionally, demand is expected to be strong next year.
“As we look to 2025, we expect aggregates price to improve high-single digits, costs to benefit from our Vulcan way of operating disciplines and moderating inflation and, most importantly, cash gross profit per ton to continue expanding at double-digit levels,” says Tom Hill, chairman and CEO of Vulcan Materials. “A demand backdrop underpinned by growth in public construction activity and an improving private demand environment should lead to volume growth in 2025. Our steadfast focus to execute at the highest level – both commercially and operationally – positions us well to capitalize on improving volume and grow earnings.”