TRG | The Bottom Line – 10/10

TRG in 2H’25 has focused on the construction & industrial value chain supporting the AI/reindustrialization buildout in the North American Market. As one key TRG industry contact shared with us this week, “No one really understands the build out of the infrastructure – it is poorly understood and is moving at a pace that is mind boggling.” This summer, TRG wrote about data centers and manufacturing’s thirst for power, and in early fall, we focused on the “thirst for water”. This week we focused on a brief case study of aggregate usage in a Meta data center build out. For heavy materials companies exposed to those data center/reindustrialization efforts, these type projects may be more than enough to offset resi and light non-res weakness. As one heavy materials industry contact shared with us: “The demand [for data centers and related projects] is staggering and like nothing we have ever seen.” While data center construction costs have been bandied about, information on project sizes don’t reflect the “actual” size of projects. We focused on Meta’s Stanton Springs Data Center as a case study on the potential impact to one industry – the aggregate industry. We found that pre-construction, the closest quarry was averaging ~150K tons per year, and after breaking ground, the closest quarry saw estimated volume of 250-350K tons per year (~2x growth). A group of nearby quarries saw a similar dynamic with volumes almost doubling from 700K tons pre-construction to almost 1.4M tons at peak. Either way you cut it, data center ultimately can be great work for multiple years, providing as much as 5-8 years of visibility based on work in progress today.