行业聚焦——第四季度建筑产品市场更新

Heading Towards Stabilization: Moving Away From RecessionDespite choppiness, supply chain normalization fosters continued activity Sector MarketObservations Recession Expectations:Elevated supplier inventorylevels combined with an unpredictable interest rateenvironment and declining single-family/office newconstruction continuesto obscure demand, tailwindsfrom non-residential construction and legislation suchas the Infrastructure Act provides a meaningful offset.Companies have found success in turning to cycle-resistant practices grounded in recurring services,durable products, and non-discretionary offerings.Mostare forecasting flat GDP,but by building/maintaining specialization and a niche differentiatingangle–many industry players have found successduringthese unprecedented times in resilientindustriessuch as data centers and broaderindustrials. M&A:A large cohort of public entities have turned tostock buybacks as a means to keep management motivated and underscore imminent outperformance. Horizontal integrationand directly related inorganic growth prospects continue to be analyzed but scope has tightened. However, expiring, raised capitalon the financial investor side and earmarked budgets on the public markets side need to be deployed. Demand persists fordifferentiated business entities that bring geographic expansion, end market insulation, or even key customer accounts. Operational Levers:While materialinput prices remainelevated, visibility persistsinto their trajectory.Ridingthat stabilization,anyexpanded margins are peggedtooffsetenergy and labor inflation.The consensusissuethatremainsisresidential new constructionas an endmarket. Those afflicted are hedging bets on repair andremodelsales channels–ifpeoplearechanging homesless,they’re more likely to renovate existingproperties.Pairedwithaflood of government moneybetweenthe Infrastructure, Inflation Reduction,andChipsAct(s)–client discussions and buyerconversationsare riding a wave of optimism thatseems to bea durableand growinglight at the end ofthe tunnel. PublicBuilding Products Manufacturers & Distributors Industry Takeaways 2023 Market Outlook “The outlook for repair and remodel demand seems especially well supported withrecord homeowner equity by the average age of the U.S. housing stock and by thenumber of single-family homes entering their prime remodeling years. With higherinterest rates,homeowners may be inclined to stay put and improve their homes. Thebottom line for Light side demand is that there is cause for optimism for the midterm and the long term as it relates to housing construction activity.”–Michael Haack, CEO, Eagle Materials “Historic legislation including the Infrastructure Investment and Jobs Act orIIJA. Inflation Reduction Act and Chips Act are expected to supportmultiyear demand for our products across infrastructure, and heavynonresidential construction sectors,thereby improving the durability ofour business through the current period of macroeconomic uncertainty.”–Howard Nye, CEO & President, Martin Marietta “We were at the buildersshow last week,and I will say the high-level big picture we got from ourcustomers in January was more optimistic than it was in the fourth quarter, but it's still very much,again, a mixed picture.Customers that are in the Westare seeing significant headwinds. Customersthat are around the Florida areaareactually seeing some flattish to positive growth…So again,onthe upper end ofthemixedpicture is negative to flattish type of growth, which is better than whatwe've seen and heard in the fourth quarter.”–Michael Olosky, COO,Simpson Manufacturing Co. M&AIndustry Quotes “And, as you mentioned, the market is a little choppy, so theworld is coming back to us a little bit from a valuationperspective. So we would expect over the next couple of yearsthat M&A will become a more important component of our capitalallocation.”–Karen Holcom, CFO, Acuity Brands “We continue to be active in the deal exploration and see M&A as animportant component of our capital allocation and growth strategy evenin periods of transition.”–Jeffrey Rodino, President, Patrick Industries “There is no change to our M&A strategy. We continue to review andselectively pursue opportunities that have the right strategic fit and the rightreturn for Masco.”–Keith Allman, CEO, Masco Corporation “In this environment, youdon't do a lot of acquisitions when people'smargins are low. Unless they're in real trouble, they tend not to want tosell given both their margins and the market multiple. So I wouldn'tassume that we're going to do much until you get to the other side whereyou're coming out and the multiples go up and the margin starts expanding.”–Jeffrey Lorberbaum, CEO,Mohawk Industries Volume, Pricing, & Inflation “We expect volumes to decline in the first quarter versus prior year in many of our end marketsand product categories as our customers continue to have a more cautious view on orderinggiven the uncertainty in