Building Suppliers’ Earnings Hurt by US Shutdown, Storm Reprieve

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(Bloomberg) — Construction material suppliers’ strong earnings performance in the US probably faced a setback as the government shutdown and a lack of storms blowing off roofs stymied demand in the fourth quarter.

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Providers of building materials with significant US exposure — including Chicago-headquartered Amrize Ltd., Denmark’s Rockwool A/S, and France’s Cie. de Saint-Gobain — are expected to report weaker earnings in the period, putting an end to a steady growth streak.

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Buoyed by strong pricing and robust demand, courtesy of both a remodel boom after the pandemic and the increased frequency of severe weather, the $40 billion annual US roofing market saw 10% compound nominal growth from 2019 to 2024, Morgan Stanley analyst Cedar Ekblom calculated. In 2025, the market declined 8%, she said.

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No hurricanes made landfall in the continental US last year for the first time since 2015, a welcome reprieve for homeowners but a significant lull for construction companies. 

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Given that weather can drive as much as 35% of volumes, a lack of storm-driven demand combined with more subdued new build activity should have reverberated across the industry, Ekblom said. 

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Owens Corning — another major player in the US construction market — expects “the lowest roofing volume in about a decade” in the fourth quarter, Chief Executive Officer Brian D. Chambers said on an analyst call in November. Volumes in the next few quarters will be “pretty light relative to the last couple of years,” he added.

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Saint-Gobain’s full-year operating profit should have declined about 1% in 2025, as the North America division sees “continued softness in new build, further weighted on by risk of roofing de-stocking from distributors,” according to Citigroup analyst Ephrem Ravi.

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“Accelerated de-stocking in US roofing following a lack of storm activity in 2025 is likely to lead to weaker performance for stocks with US roofing exposure,” JPMorgan analyst Elodie Rall said, singling out Amrize in particular and removing it from positive catalyst watch ahead of earnings. 

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Shutdown Hit

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The US government shutdown has also likely had adverse consequences, Rall added. There are already signs of the impact, with Sika AG reporting preliminary numbers that fell short of expectations earlier this month, which it partly blamed on the longest shutdown in US history. 

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“Global markets were soft in the fourth quarter, including US commercial construction trends, which were exacerbated by the government shutdown,” said the maker of bonding and sealing products for the building sector. JPMorgan’s Rall anticipates “continued earnings disappointments” from the company. 

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Morgan Stanley’s Ekblom expects weaker volumes to hurt the sector’s margins over the second half of 2025 and the first half of 2026, though she sees this as a “cyclical pullback” rather than the beginning of a structural retreat. 

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Long-term growth drivers — including aging housing stock needing upgrades, increasing storm frequency and severity requiring repairs, and an ongoing recovery in the housing market — are still “intact,” she said. 

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Construction companies with more diversified end markets like Saint-Gobain may also benefit from growing demand for infrastructure and energy transition projects, helping to offset more muted activity in residential and commercial construction, Bloomberg Intelligence’s Kevin Kouam said. 

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