High Commodity Prices Are Fueling Construction Sector Consolidation

The prices of many materials have risen sharply over the last year. The economic repercussions from the pandemic have included low inventories and disrupted supply chains. Combined with a sharp rebound in consumer demand, this has resulted in rising prices for commodities including copper and steel, and construction materials like lumber and concrete.

While that might be hurting consumers' wallets, it's pumping up profits for the companies in those industries. Some of the larger players are using their rising cash flows to buy out their peers. Leading steelmaker Nucor (NYSE: NUE) and producer of construction aggregates Vulcan Materials (NYSE: VMC) both just announced large acquisitions that will help them consolidate their industries and provide both with more opportunities for growth.

Image source: Getty Images.

Source Fool.com