Concrete Financial Insights Building Materials Focus Financial Expertise
Ready Mixed Concrete Volume & Price Trends
Industry volume trends
Concrete production and delivery is a $56 billion revenue industry in the United States based on the average 2022 selling price from the Concrete Financial Insights Index. The industry continues a slow but steady recovery from the downturn which occurred after the general economic crisis in 2008.
Between 2002 and 2022, ready mixed concrete shipments grew at a cumulative average growth rate of a mere 0.2% per year but there were lots of ups and downs along the way .
Concrete volumes of 404 million cubic yards in 2022 were 2.4% higher than delivered volumes of the prior year.
The weighted average of the full year selling prices reported by the companies within the Concrete Financial Insights Index grew from $107.78 in 2015 to $139.80 in 2022 for a cumulative average growth rate of 3.8% over this period as illustrated in the chart below.
Insights
Shortages of cement, an essential raw material for concrete, are limiting concrete production volumes in some sections of the U.S. in 2022.
The estimated full year volumes for 2022 remained well below the previous peak for ready mix concrete volumes in 2005. Shipments of 404 million cubic yards of ready mixed concrete in 2022 were 55 million cubic yards, or 12%, below that peak year.
Concrete selling price increases began to catch up with the inflation in cost inputs such as diesel fuel, cement, aggregates, and labor in 2022 after failing to keep pace in 2021
Concrete Prices - Concrete Financial Insights Index
Ready mixed concrete price evolution
The weighted average of the full year selling prices reported by the five companies in the Concrete Financial Insights Index grew from $107.78 in 2015 to $139.80 in 2022 for a cumulative average growth rate of 3.8% over this period.
What is the average price per cubic yard for ready mix concrete in the United States? That’s not as simple a question to answer, based on publicly available information, as it might seem. There is no government statistical reporting of ready-mix concrete prices equivalent to the US Geological Survey reports on cement, crushed stone, and sand & gravel pricing. Additionally, many of the publicly traded participants within the US ready mixed concrete industry do not separately report concrete segment volumes and revenues. Four industry participants who lead the industry in financial reporting transparency by reporting US concrete volumes and pricing are Eagle Materials, Martin Marietta, Summit Materials, and Vulcan Materials.
The National Ready Mixed Concrete Association estimates that the US concrete industry shipped 404 million cubic yards of ready mixed concrete during 2022 and the four companies included in the Concrete Financial Insights Index of weighted average ready mixed concrete pricing represent only 6% of that volume. It’s likely that this group’s weighted average pricing is somewhat higher than that of the overall US industry because these four firms have the technical capabilities and plant locations to service large commercial and infrastructure projects requiring higher strength mixes with more costly blends of raw materials.
Insights
Concrete selling price increases had not been keeping pace with the inflation in cost inputs such as diesel fuel, cement, aggregates, and labor in recent years. The 12% increase in average selling price realized in 2022 should be viewed as making up lost ground for an industry in which nearly 40% of the 2021 volume was sold at a loss.
Not all integrated construction materials producers provide segment reporting detail for their concrete operations. We believe that transparent segment reporting of the concrete operations by all integrated participants within the U.S. construction materials industry would be extremely beneficial for investors and other stakeholders. Publishing this information would allow analysts and investors to compare and contrast the operating results of the publicly traded firms within the ready mixed concrete segment of construction materials more accurately.