U.S. building materials sector poised for growth in 2022 - Citigroup

Eagle Materials

10/03/2022 14:02

** Citigroup says the three market segments within the
building material sector - residential, non-residential and
infrastructure - are poised to grow conjointly in 2022 for the
first time in many years in the U.S.
    ** Brokerage says growth to be driven by strong demand in
single family homebuilding, healthy infrastructure budgets
provided at the state and local levels in the U.S.
    ** Companies with more significant exposure in U.S. southern
markets such as Eagle Materials  EXP.N , Martin Marietta
Materials  MLM.N , and Summit Materials  SUM.N  are likely to
benefit from the residential market demand vs peers
    ** U.S. construction spending surged in January, boosted by
strong outlays on single-family homebuilding and private
non-residential structures  urn:newsml:reuters.com:*:nL1N2V32SF
    ** "Underlying conditions still point towards strong demand,
with U.S. single family starts in 2022 expected to be 25% higher
than pre-pandemic levels in 2019" - Citigroup
    ** While headwinds like cost inflation and supply chain
constraints have been spilled over from H2 2021 to H1 2022,
brokerage forecasts both headwinds to ease in H2 2022
    ** "Despite robust revenue growth, the pace of EBITDA growth
is expected to decelerate, with low-to-mid single digit growth
outlook for most companies," says Citigroup

 (Reporting by Siddarth S in Bengaluru)
 ((Siddarth.s@thomsonreuters.com;))