TRG | The Bottom Line – 10/16

TRG published its final two reports from Q3’26 survey season this week, the Residential & Non-Residential Product Survey and Equipment Rental Survey. The overarching theme remains one of uneven construction demand, with residential activity continuing to face significant headwinds while large non-res projects provide an important offset to an otherwise low-growth environment.
 
On the residential side, affordability remains a major obstacle. The 30-year mortgage rate is above 7%, home prices remain elevated, and single-family permits have been stuck at low levels for the past 14 months. Existing home sales have hovered around 4MM since November 2022, well below the 2013–2021 average of 5.4MM. 
 
The Equipment Rental Survey highlights an important distinction within the broader construction cycle. While non-res activity remains low-growth overall, companies with meaningful exposure to large projects continue to outperform those more dependent on local construction markets. This divergence is increasingly important when evaluating rental revenue growth and operating performance.
 
The takeaway from both surveys is that the construction cycle is increasingly a story of where companies are exposed, rather than simply whether overall demand is growing. Residential remains constrained, and broad non-res growth is modest, but companies positioned around large projects continue to find opportunities for growth. In our view, that distinction will remain important as we move into 2027.

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