On the road again – US gas tax receipts rebuilding rapidly

  • Sectors : Building Materials
  • Companies : CRH

Ratings and price correct at time of issue.

  • CRH

    Closing Price: 3831c

  • RATING 23/05/12

  • PREVIOUS RATING 12/01/12



Q3 is likely to have seen softer demand trends in construction end-markets in the US. That has been well flagged, with state budgets under pressure as tax receipts dipped. However, we think it is exactly that – a dip – as we see long-term highway use trends and revenue collection now normalizing. Our analysis shows that tax receipts to the Highway Trust Fund have recovered strongly and are now down only 4% year-on-year through September. Likewise, driving activity and vehicle miles travelled are improving. Short-term volatility is likely as the US shakes off the effects of the pandemic. However, long-term infrastructure fundamentals are intact, and the political agenda is likely to become more supportive. In that environment, we expect CRH to be a clear winner given its large exposure to highway construction and maintenance in the US.

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Oct 20 2020, 06:30 IST/BST