The Zacks Building Products – Concrete & Aggregates industry is expected to benefit from steady infrastructure spending in 2026, supported by remaining funds under the Infrastructure Investment and Jobs Act and healthy state and local transportation budgets. Public works tied to highways, bridges, airports, water systems and other projects should provide a stable demand base and support pricing discipline. Heavy nonresidential construction also remains a key growth driver, with data centers, semiconductor plants, advanced manufacturing, power projects and LNG developments requiring large volumes of aggregates, cement and concrete. Population growth and business migration to Sunbelt markets further strengthen demand visibility. Industry players are also using acquisitions, cost controls, operating efficiencies and solid pricing to improve earnings and cash flows.
Although weak residential construction, elevated mortgage rates, high costs, tariffs and weather-related disruptions remain key risks, profitability and demand visibility appear solid, with long-term fundamentals remaining favorable for leaders such as Vulcan Materials Company VMC, Eagle Materials Inc. EXP and Suncrete, Inc. RMIX.
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
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.
High Demand for Data Centers and Industrial Projects: Heavy nonresidential construction is a major industry growth driver in 2026. Data centers, semiconductor plants, advanced manufacturing facilities, power projects and LNG developments require substantial volumes of aggregates, cement and concrete. AI infrastructure expansion is also increasing demand for supporting energy systems, roads, utilities and site preparation. Meanwhile, population growth and business migration to Sunbelt states continue to support commercial and infrastructure activity. These large, multiyear projects provide strong demand visibility. Limited quarry reserves and lengthy permitting processes for new capacity should also help preserve a favorable supply-demand balance as construction activity expands.
Meanwhile, the industry participants follow a well-chalked-out acquisition plan to enhance domestic and international portfolios. Moreover, companies are increasingly focusing on reducing controllable costs and maximizing operating efficiency across business lines to generate higher earnings and cash flows. The industry players have also been experiencing a solid pricing environment across their product portfolios, thereby helping to boost margins.
Residential Construction Weakness: The U.S. Concrete and Aggregates industry continues to face pressure from weak residential construction demand, especially in single-family housing, as elevated mortgage rates, high home prices and affordability challenges continue to limit new home demand. Higher borrowing costs are also weighing on housing-related commercial projects. While the United States still faces a long-term housing shortage, a meaningful recovery will likely depend on lower interest rates and improved buyer confidence. Since housing is an important end market for aggregates, prolonged weakness can restrain shipment volumes and plant utilization.
Persistent Cost Inflation and Weather Risks: Persistent cost inflation remains a major headwind for the concrete and aggregates industry in 2026. Higher diesel, electricity, natural gas, labor and transportation costs, along with tariffs that have increased the cost of imported machinery and equipment, continue to pressure margins. While pricing actions and operating efficiencies provide some relief, profitability remains under strain. 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.
Zacks Industry Rank Indicates Bright 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 #57, which places it in the top 23% 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 bullish 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 top 50% of the Zacks-ranked industries is a result of a higher earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since March 2026, the industry’s earnings estimates for 2027 have increased to $2.66 per share from $2.60. For 2026, earnings estimates have remained unchanged at $2.29.
Before highlighting a few stocks worth considering for your portfolio, let’s first review the industry’s recent stock market performance and valuation trends.
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 gained 6.9% compared with the broader sector’s 12.6% rise over the past year. Meanwhile, the S&P 500 has gained 23.1% 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 21.78X versus the S&P 500’s 21.03X and the sector’s 20.69X.
Over the past five years, the industry has traded as high as 25.98X, as low as 13.86X and at a median of 19.91X, 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
3 Concrete & Aggregates Stocks to Keep an Eye On
Below, we have discussed three stocks from the Zacks Concrete & Aggregates universe that have growth potential.
Eagle Materials: Headquartered in Dallas, TX, this company manufactures and sells heavy construction products and light building materials across the United States. Eagle Materials’ long-term prospects remain favorable, supported by healthy infrastructure spending, expanding data center construction and disciplined investment in capacity and efficiency. Management expects federal, state and local infrastructure projects, including spending under the Infrastructure Investment and Jobs Act (IIJA), to continue supporting cement demand, while private non-residential activity remains strong. Although residential construction and gypsum wallboard demand are pressured by elevated mortgage rates, the company expects housing demand to recover over time due to constrained supply. Meanwhile, modernization of the Mountain Cement and Duke Wallboard plants is expected to lower operating costs, improve reliability and increase production flexibility, reinforcing Eagle Materials’ low-cost competitive position and supporting long-term earnings growth.
Eagle Materials, a Zacks Rank #1 (Strong Buy) stock, has dipped 7.9% over the past year. Yet, earnings estimates for fiscal 2027 have increased to $13.02 from $12.50 per share over the past 60 days. Although the fiscal 2027 earnings per share (EPS) estimate depicts 1.1% year-over-year decline, the same for fiscal 2028 calls for 9.8% 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 6.2%. It has a VGM Score of B.
Price and Consensus: EXP
Suncrete: The company, which became a public corporation in April 2026 after completing a business combination with Haymaker Acquisition Corp. 4. has promising growth prospects as it enters the public market. The company is strategically focused on the fast-growing U.S. Sunbelt, with an existing footprint across Oklahoma and Arkansas and plans to expand further. Its vertically integrated model, including batching plants, owned mixer trucks and tech-enabled dispatch systems, should support efficiency and stronger margins. Suncrete also serves diversified end markets such as infrastructure, commercial and residential construction, reducing reliance on any single segment. Suncrete’s growth prospects remain encouraging, supported by robust demand across infrastructure, commercial and residential construction markets in the high-growth U.S. Sunbelt. It is expanding its geographic footprint through the acquisitions of Hope Concrete and Nelson Bros. Management expects these acquisitions, together with continued organic growth, to drive 2026 revenues of $420-$480 million and adjusted EBITDA of $68-$93 million. Although higher interest costs and acquisition-related expenses weighed on first-quarter profitability, strong revenue growth and rising shipment volumes indicate healthy underlying demand.
Suncrete, a Zacks Rank #3 (Hold) stock, has gained 78.8% over the past month. The Zacks Consensus Estimate for RMIX’s 2026 EPS and revenues calls for 21 cents and $468.8 million, respectively. For 2027, the consensus mark for RMIX’s EPS and revenues depicts 127% and 54.2% growth, respectively.
Price and Consensus: RMIX
Vulcan: This Birmingham, AL-based company produces and supplies construction aggregates, asphalt mix, and ready-mixed concrete. Vulcan has been gaining from sustained public infrastructure spending, improving private nonresidential construction and rising demand from data center development. The company also expects the expansion of power and energy infrastructure to create additional opportunities as electricity networks are upgraded to support AI-related investments. Its strong market presence in high-growth regions, disciplined pricing strategy, operational efficiency initiatives and focus on expanding its aggregates business through acquisitions and greenfield projects further strengthen its long-term growth prospects.
Vulcan, a Zacks Rank #3 stock, has gained 7.4% over the past year. Earnings estimates for fiscal 2027 have increased to $9.27 from $9.24 per share over the past 30 days. Also, the 2026 and 2027 EPS estimates depict 15.9% and 15.1% year-over-year growth, respectively. This company surpassed earnings estimates in two of the trailing four quarters and missed on the other two occasions, with the average surprise being 0.6%. It has a three-to-five-year expected EPS growth rate of 15%.
Price and Consensus: VMC
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This article originally published on Zacks Investment Research (zacks.com).
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