TRG | The Bottom Line – 10/9

TRG published its first two survey reports from Q3’26 survey season this week – Heavy Materials & Infrastructure Survey and Contractor & Surety Survey. The demand side remains solid but varied – megaprojects are robust, light-commercial is flattish, and road spending is steady. Wet weather reduced volume in Q2, but the dry weather in Q3 allowed for more work days, which supported materials volumes in the quarter. Looking further out, contractors and sureties see robust activity with large and growing backlogs in megaprojects (some see strength through 2029 in data centers and stadiums). On the light commercial side, there is no light at the end of that tunnel. As for road spending, many are waiting and watching to see what level of funding that Congress can get passed. We believe Wall Street is on the sidelines on the Materials’ stocks, also waiting and watching what Congress does.

The supply and cost side has more movement recently, particularly due to oil-driven inputs. Diesel prices are up meaningfully, both sequentially and YOY. These could negatively impact margin in the near-term, and support price increases that could help recover margin in the medium term. As for contractors, overall participants are disciplined and margins are flat YOY at high levels. As for equipment rental and modular offices, the key KPIs of utilization and pricing are both solid for providers that can serve large projects.

Overall, we see this as a healthy backdrop for companies (materials, equipment, contractors) in this ecosystem. Interestingly, the materials’ (and related) stocks overall are far off their highs and underperforming the market. We expect many investors are waiting for clarity on funding. We believe the current prices are adequately discounting this uncertainty and create a buying opportunity.


Disclosure: This content reflects the independent views of Thompson Research Group, LLC (“TRG”), is provided for informational purposes only, and does not constitute an offer or solicitation to buy or sell any security. Additional information, including analyst certification and compensation-related conflicts of interest, may be found here: (disclosures).