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2 Concrete & Aggregates Stocks Positioned to Weather Industry Challenges
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The Zacks Building Products - Concrete & Aggregates industry continues to face headwinds from subdued residential construction, elevated mortgage rates and persistent affordability concerns, which are curbing housing-related demand. Weakness in residential activity is also spilling over into certain light nonresidential construction markets. At the same time, higher energy, diesel and freight costs are pressuring production and transportation expenses. Weather-related disruptions can further reduce shipment volumes and plant utilization, while lengthy permitting processes restrict capacity additions and limit supply flexibility.
Despite these headwinds, the industry is finding support from steady public infrastructure spending and large nonresidential projects. Remaining federal infrastructure funds, healthy state transportation budgets and multiyear highway programs are sustaining demand, while data centers, power infrastructure, manufacturing and LNG projects are creating additional materials requirements. Overall, these factors should provide some demand stability for companies such as Vulcan Materials Company (VMC - Free Report) and Eagle Materials Inc. (EXP - Free Report) .
Industry Description
The Zacks Building Products - Concrete & Aggregates industry consists of manufacturers, distributors and sellers of construction materials like aggregates and concrete along with other related items for public infrastructure, residential and non-residential, as well as other end markets. The materials also include gypsum wallboard, recycled paperboard, concrete blocks, ready-mix concrete, and oil and gas proppants. The industry players are also involved in designing, engineering, manufacturing, marketing, and installation of external building products for commercial, residential, and repair and remodel markets in domestic as well as international markets.
4 Trends Shaping the Future of Concrete & Aggregates Industry
Residential Weakness Limits Broader Volume Growth: Residential construction remains one of the most significant demand headwinds for the U.S. Concrete and Aggregates industry in 2026. Elevated mortgage rates and affordability pressures continue to constrain single-family housing activity, limiting materials demand from new-home construction and related development. Weak housing activity can also weigh on light nonresidential construction, since categories such as retail and local commercial development often follow residential growth. Although underlying housing demand remains structurally supportive over the longer term, there is still limited visibility on a near-term catalyst that could materially accelerate housing starts. As a result, residential-linked volumes are likely to remain subdued until borrowing costs ease and affordability improves.
Energy, Freight, Weather and Permitting Pressure Costs: Persistent cost and operating pressures remain another key challenge for the industry. Elevated energy and diesel prices increase quarrying, production and transportation expenses, while higher freight costs can pressure delivered margins because aggregates and concrete are heavy, locally distributed products.
The industry is also vulnerable to weather-related disruptions. Heavy rainfall, flooding, droughts, winter storms and hurricanes can delay construction activity, disrupt production and shipments, increase operating costs and reduce profitability, particularly during the first and fourth quarters.
At the same time, permitting constraints limit the industry's ability to rapidly expand quarry and production capacity. New or expanded facilities often require lengthy approval processes, increasing development timelines and restricting supply flexibility. These factors can complicate volume growth and raise operating costs even when underlying demand remains healthy. Consequently, pricing discipline, productivity initiatives, network optimization and careful cost management will remain important for protecting profitability throughout 2026.
Focus on U.S. Infrastructure: Public infrastructure spending is expected to remain the industry’s strongest demand driver in 2026. A large share of funding authorized under the Infrastructure Investment and Jobs Act has yet to move into active construction, supporting highways, bridges, airports, water systems and other public works. State and local transportation budgets remain healthy, giving contractors and material suppliers visibility into project pipelines. The successor to the federal surface transportation program should further support activity, even if temporary funding measures are needed during the transition. Because infrastructure projects consume large volumes of aggregates, cement and ready-mix concrete, this spending provides a stable demand base and helps offset weakness in rate-sensitive construction markets. Public work should also support pricing discipline and improve plant and fleet utilization across many regions.
Data Centers and Heavy Nonresidential Construction Expand: Large-scale private construction is emerging as another important growth engine for the industry. Data-center development continues to accelerate across several U.S. regions, creating direct demand for concrete and aggregates while also stimulating investment in power generation, utilities, warehousing and surrounding infrastructure. Domestic manufacturing projects, LNG developments and other industrial facilities are adding to this opportunity. The expansion of these large projects is particularly beneficial because they typically require substantial site preparation, foundations, roads and supporting infrastructure, making them highly materials intensive. Data-center growth is also generating spillover construction in related categories, including utility networks and community build-outs. As these secular investment themes continue, heavy nonresidential construction should help offset weakness in more rate-sensitive end markets and provide an important source of industry demand through 2026.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Building Products - Concrete & Aggregates industry is a seven-stock group within the broader Zacks Construction sector. The industry currently carries a Zacks Industry Rank #222, which places it in the bottom 10% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a lower earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since July 2026, the industry’s earnings estimates for 2026 and 2027 have decreased to $2.20 per share (from $2.60) and to $2.63 per share (from $2.66), respectively.
Despite the industry’s blurred near-term view, we will present a few stocks that one may consider adding to their portfolio. Before that, it’s worth taking a look at the industry’s shareholder returns and current valuation.
Industry Lags Sector & S&P 500
The Zacks Building Products - Concrete & Aggregates industry has underperformed the broader Zacks Construction sector and the Zacks S&P 500 Composite over the past year, respectively.
Stocks in this industry have collectively lost 20.2% compared with the broader sector’s 5.5% decline over the past year. Meanwhile, the S&P 500 has gained 15.5% in the same period.
One-Year Price Performance
Concrete & Aggregates Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings, which is a commonly used multiple for valuing Building Products - Concrete & Aggregates stocks, the industry is currently trading at 18.04X versus the S&P 500’s 19.61X and the sector’s 17.92X.
Over the past five years, the industry has traded as high as 25.98X, as low as 13.86X and at a median of 19.88X, as the chart below shows.
Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500
Industry’s P/E Ratio (Forward 12-Month) Versus Sector
2 Concrete & Aggregates Stocks to Keep an Eye On
Below, we have discussed two stocks from the Zacks Concrete & Aggregates universe that have growth potential.
Vulcan: This Birmingham, AL-based company produces and supplies construction aggregates, asphalt mix and ready-mixed concrete. Vulcan has been gaining from strong public infrastructure demand, healthy highway and infrastructure award activity and continued funding from federal, state and local programs. Large private projects are another key driver, particularly data centers, manufacturing facilities, LNG developments and expanding power-generation and power-infrastructure investment. The company’s advantaged geographic footprint and extensive distribution network strengthen its ability to capture these opportunities. Growth is also supported by disciplined pricing, operating efficiencies under the Vulcan Way of Operating and Selling, and an active pipeline of aggregates-focused acquisitions and greenfield projects that can expand its market reach and improve margins.
Vulcan, a Zacks Rank #3 (Hold) stock, has plunged 20.2% over the past year. The Zacks Consensus Estimate for 2026 and 2027 earnings per share (EPS) is pegged at 13.8% and 15.1% year-over-year growth, respectively. This company surpassed earnings estimates in three of the trailing four quarters and missed on the other occasion, with the average surprise being 2.5%. It has a three-to-five-year expected EPS growth rate of 11.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: VMC
Eagle Materials: Headquartered in Dallas, TX, this company manufactures and sells heavy construction products and light building materials across the United States. Its robust public infrastructure spending, backed by federal funding and healthy state transportation budgets, along with strengthening private nonresidential construction, particularly data-center development and related utility, warehouse and community projects are encouraging. Its low-cost production model, extensive cement network and disciplined investment strategy also enhance resilience and operating leverage. Ongoing modernization projects should improve plant efficiency, reliability and competitiveness, while the structurally undersupplied U.S. cement market offers longer-term pricing and margin-expansion potential.
Eagle Materials, a Zacks Rank #3 stock, has dipped 27.5% over the past year. Earnings estimates for fiscal 2027 and 2028 have remained unchanged at $12.66 per share and $14.34 per share, respectively, over the past 60 days. Although the fiscal 2027 EPS estimate depicts a 3.8% year-over-year decline, the same for fiscal 2028 calls for 13.2% growth. This company surpassed earnings estimates in two of the trailing four quarters and missed on the other two occasions, with the average surprise being 6.3%. It has a VGM Score of B.
View the Zacks #1 Rank List
Image: Bigstock
2 Concrete & Aggregates Stocks Positioned to Weather Industry Challenges
The Zacks Building Products - Concrete & Aggregates industry continues to face headwinds from subdued residential construction, elevated mortgage rates and persistent affordability concerns, which are curbing housing-related demand. Weakness in residential activity is also spilling over into certain light nonresidential construction markets. At the same time, higher energy, diesel and freight costs are pressuring production and transportation expenses. Weather-related disruptions can further reduce shipment volumes and plant utilization, while lengthy permitting processes restrict capacity additions and limit supply flexibility.
Despite these headwinds, the industry is finding support from steady public infrastructure spending and large nonresidential projects. Remaining federal infrastructure funds, healthy state transportation budgets and multiyear highway programs are sustaining demand, while data centers, power infrastructure, manufacturing and LNG projects are creating additional materials requirements. Overall, these factors should provide some demand stability for companies such as Vulcan Materials Company (VMC - Free Report) and Eagle Materials Inc. (EXP - Free Report) .
Industry Description
The Zacks Building Products - Concrete & Aggregates industry consists of manufacturers, distributors and sellers of construction materials like aggregates and concrete along with other related items for public infrastructure, residential and non-residential, as well as other end markets. The materials also include gypsum wallboard, recycled paperboard, concrete blocks, ready-mix concrete, and oil and gas proppants. The industry players are also involved in designing, engineering, manufacturing, marketing, and installation of external building products for commercial, residential, and repair and remodel markets in domestic as well as international markets.
4 Trends Shaping the Future of Concrete & Aggregates Industry
Residential Weakness Limits Broader Volume Growth: Residential construction remains one of the most significant demand headwinds for the U.S. Concrete and Aggregates industry in 2026. Elevated mortgage rates and affordability pressures continue to constrain single-family housing activity, limiting materials demand from new-home construction and related development. Weak housing activity can also weigh on light nonresidential construction, since categories such as retail and local commercial development often follow residential growth. Although underlying housing demand remains structurally supportive over the longer term, there is still limited visibility on a near-term catalyst that could materially accelerate housing starts. As a result, residential-linked volumes are likely to remain subdued until borrowing costs ease and affordability improves.
Energy, Freight, Weather and Permitting Pressure Costs: Persistent cost and operating pressures remain another key challenge for the industry. Elevated energy and diesel prices increase quarrying, production and transportation expenses, while higher freight costs can pressure delivered margins because aggregates and concrete are heavy, locally distributed products.
The industry is also vulnerable to weather-related disruptions. Heavy rainfall, flooding, droughts, winter storms and hurricanes can delay construction activity, disrupt production and shipments, increase operating costs and reduce profitability, particularly during the first and fourth quarters.
At the same time, permitting constraints limit the industry's ability to rapidly expand quarry and production capacity. New or expanded facilities often require lengthy approval processes, increasing development timelines and restricting supply flexibility. These factors can complicate volume growth and raise operating costs even when underlying demand remains healthy. Consequently, pricing discipline, productivity initiatives, network optimization and careful cost management will remain important for protecting profitability throughout 2026.
Focus on U.S. Infrastructure: Public infrastructure spending is expected to remain the industry’s strongest demand driver in 2026. A large share of funding authorized under the Infrastructure Investment and Jobs Act has yet to move into active construction, supporting highways, bridges, airports, water systems and other public works. State and local transportation budgets remain healthy, giving contractors and material suppliers visibility into project pipelines. The successor to the federal surface transportation program should further support activity, even if temporary funding measures are needed during the transition. Because infrastructure projects consume large volumes of aggregates, cement and ready-mix concrete, this spending provides a stable demand base and helps offset weakness in rate-sensitive construction markets. Public work should also support pricing discipline and improve plant and fleet utilization across many regions.
Data Centers and Heavy Nonresidential Construction Expand: Large-scale private construction is emerging as another important growth engine for the industry. Data-center development continues to accelerate across several U.S. regions, creating direct demand for concrete and aggregates while also stimulating investment in power generation, utilities, warehousing and surrounding infrastructure. Domestic manufacturing projects, LNG developments and other industrial facilities are adding to this opportunity. The expansion of these large projects is particularly beneficial because they typically require substantial site preparation, foundations, roads and supporting infrastructure, making them highly materials intensive. Data-center growth is also generating spillover construction in related categories, including utility networks and community build-outs. As these secular investment themes continue, heavy nonresidential construction should help offset weakness in more rate-sensitive end markets and provide an important source of industry demand through 2026.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Building Products - Concrete & Aggregates industry is a seven-stock group within the broader Zacks Construction sector. The industry currently carries a Zacks Industry Rank #222, which places it in the bottom 10% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates bearish near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a lower earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential. Since July 2026, the industry’s earnings estimates for 2026 and 2027 have decreased to $2.20 per share (from $2.60) and to $2.63 per share (from $2.66), respectively.
Despite the industry’s blurred near-term view, we will present a few stocks that one may consider adding to their portfolio. Before that, it’s worth taking a look at the industry’s shareholder returns and current valuation.
Industry Lags Sector & S&P 500
The Zacks Building Products - Concrete & Aggregates industry has underperformed the broader Zacks Construction sector and the Zacks S&P 500 Composite over the past year, respectively.
Stocks in this industry have collectively lost 20.2% compared with the broader sector’s 5.5% decline over the past year. Meanwhile, the S&P 500 has gained 15.5% in the same period.
One-Year Price Performance
Concrete & Aggregates Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings, which is a commonly used multiple for valuing Building Products - Concrete & Aggregates stocks, the industry is currently trading at 18.04X versus the S&P 500’s 19.61X and the sector’s 17.92X.
Over the past five years, the industry has traded as high as 25.98X, as low as 13.86X and at a median of 19.88X, as the chart below shows.
Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500
Industry’s P/E Ratio (Forward 12-Month) Versus Sector
2 Concrete & Aggregates Stocks to Keep an Eye On
Below, we have discussed two stocks from the Zacks Concrete & Aggregates universe that have growth potential.
Vulcan: This Birmingham, AL-based company produces and supplies construction aggregates, asphalt mix and ready-mixed concrete. Vulcan has been gaining from strong public infrastructure demand, healthy highway and infrastructure award activity and continued funding from federal, state and local programs. Large private projects are another key driver, particularly data centers, manufacturing facilities, LNG developments and expanding power-generation and power-infrastructure investment. The company’s advantaged geographic footprint and extensive distribution network strengthen its ability to capture these opportunities. Growth is also supported by disciplined pricing, operating efficiencies under the Vulcan Way of Operating and Selling, and an active pipeline of aggregates-focused acquisitions and greenfield projects that can expand its market reach and improve margins.
Vulcan, a Zacks Rank #3 (Hold) stock, has plunged 20.2% over the past year. The Zacks Consensus Estimate for 2026 and 2027 earnings per share (EPS) is pegged at 13.8% and 15.1% year-over-year growth, respectively. This company surpassed earnings estimates in three of the trailing four quarters and missed on the other occasion, with the average surprise being 2.5%. It has a three-to-five-year expected EPS growth rate of 11.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price and Consensus: VMC
Eagle Materials: Headquartered in Dallas, TX, this company manufactures and sells heavy construction products and light building materials across the United States. Its robust public infrastructure spending, backed by federal funding and healthy state transportation budgets, along with strengthening private nonresidential construction, particularly data-center development and related utility, warehouse and community projects are encouraging. Its low-cost production model, extensive cement network and disciplined investment strategy also enhance resilience and operating leverage. Ongoing modernization projects should improve plant efficiency, reliability and competitiveness, while the structurally undersupplied U.S. cement market offers longer-term pricing and margin-expansion potential.
Eagle Materials, a Zacks Rank #3 stock, has dipped 27.5% over the past year. Earnings estimates for fiscal 2027 and 2028 have remained unchanged at $12.66 per share and $14.34 per share, respectively, over the past 60 days. Although the fiscal 2027 EPS estimate depicts a 3.8% year-over-year decline, the same for fiscal 2028 calls for 13.2% growth. This company surpassed earnings estimates in two of the trailing four quarters and missed on the other two occasions, with the average surprise being 6.3%. It has a VGM Score of B.
Price and Consensus: EXP