US building materials supplier Carlisle Companies reported an increase in revenue in the third quarter but expects soft residential demand to continue through the end of the year.
Carlisle Companies lowered its 2024 guidance from 12pc to 10pc revenue growth, partly due to the challenging construction environment. Two hurricanes along the Gulf Coast and a port strike that limited work in the third quarter also led the company to lower guidance.
Revenue in the third quarter rose by 6pc to $1.3bn compared with a year prior, led by sales in the Carlisle Construction Materials (CCM) segment, which grew by 9pc to $998mn. CCM growth was driven by continued contractor backlogs, commercial re-roofing demand and inventory normalization, the company said.
The company anticipates significant pent up re-roofing demand to drive growth over the next few years, specifically in the commercial building space.
Carlisle Weatherproofing Technologies (CWT) revenue declined 3pc to $335mn in the third quarter from a year earlier. Softer residential end markets in a high interest rate environment and low housing turnover impacted the CWT business segment, said Carlisle President, Chris Koch.
The US Federal Reserve cut its target interest rate in September, the first rate cut since 2020, with the expectation of more to come. Most market participants do not expect economic factors to impact orders until one to two quarters after such movements.
Construction is one of the largest demand sectors for MDI and polyols for use in insulation board and polyurethane coatings. The construction industry is the most active in the summer and demand for chemicals like MDI into insulation board tends to be steady through the third quarter and taper off into the fourth.
