Brent Thielman: Okay. I guess just last one on Construction Products, the natural aggregates business in particular, I mean, given the fact that you’ve seen what seems to be sort of a volume inflection, we’ll call it here this quarter. Are you — are you more confident that you can continue to increase volumes in 2024 for that business?
Antonio Carrillo: Well, as Gail mentioned in her comment before, we saw flattening volumes in the second quarter. We saw an increase in this quarter. We are as much more companies than some of our peers. So we have more — probably more volatility in our regional businesses than some of them that have a wider net and more geographic diversification. We are in great geographies. And by being in great geographies means probably we have very good demand fundamentals. But there’s still a lot of uncertainty. What we also think is that the infrastructure bill should start kicking in and should help us compensate reduction in volumes in housing and other areas we are seeing heavy manufacturing builds throughout the country in our regions.
So, I think everything is set up for some of the demand factors too strong, some are not as strong. I think we have a lot of confidence in our pricing. So, what I can tell you is that we are confident that our pricing will be able to help us with some volume improvements get a, let’s say, a positive mix pricing volume for 2024 and continue increasing our margins. I’m going to go back also to your question on wind towers. The other thing I forgot to mention. we mentioned a small order that we received for two towers. It’s a very important step for Arcosa because, as you know, we’re — the industry doesn’t have many customers. So, having a new customer that’s a large customer with a heavy presence in the US, it’s important for us to qualify and be able to get another source of large orders in the future.
So I’m excited about that.
Brent Thielman: Understood. Thank you, Antonio.
Operator: [Operator Instructions] We’ll take our next question from Julio Romero with Sidoti & Company.
Alex Hantman: Good morning Antonio and Gail. This is Alex Hantman on for Julio.
Antonio Carrillo: Good morning.
Gail Peck: Good morning.
Alex Hantman: My first question is on something asked a little earlier. On macro, can you speak to the broader impact of higher interest rates in the general economic uncertainty across the portfolio? For example, I’m thinking about just which business units are most affected versus resilience at the moment.
Antonio Carrillo: This is Antonio. I would say that the biggest impact, of course, is housing where mortgage rates continue to be a moderator of demand. And then any one of our customers that has leverage, I think, has — if you have to borrow to buy things, it’s an important one. So, I would say barges probably is one of them. But if you look at, for example, transmission hours, those things are — I mean, of course, the utility have leverage and everything, but they are pretty insulated. The demand is very strong. I would say wind towers is the same thing. So, most of our projects have those fundamentals that are — most of our products have their own fundamentals let’s split construction products is 1 thing. The other ones are — they have their own fundamentals that are really drivers of the demand.
interest rates, of course, affect the whole economy. So, I’m not saying it doesn’t affect. I’m just saying it’s not the — is the deciding factor to buy a barge or to buy a transmission tower. On the construction side, of course, housing, but also it affects multifamily and all these other projects. So we’re not in new interest rates. Of course, we’re not — but I think we’ve given our backlog and given our diversification, we’re in really good shape to be able to overcome this and also talk about our balance sheet. We have a strong balance sheet. Gail mentioned, we just paid down some of the debt we had and we have a very, very good balance sheet to be able to allocate our capital correctly. And also when you look at — in this environment, having a strong balance sheet with higher interest rates.
It also presents opportunities for us to be able to take advantages that other companies might not be able to do and some of the private equity firms might not be able to compete in some of the processes, et cetera. So, there’s risk and there’s opportunities.
Alex Hantman: Yes, very helpful color. Thank you, Antonio. We’ve spoken a lot about the margin impacts today. So, I wanted to just touch on the barge business. Could you give us a sense of how orders might trend in the fourth quarter?
Antonio Carrillo: I mentioned in my remarks that — and later that the river was an issue during the third quarter. We don’t expect it to be during the second part of the fourth quarter. And I think our customers, if you talk to them, they need the barges. They want the barges steel prices, which I have not mentioned in my remarks, but it’s important they have come down quite a bit. And during the third quarter, we got to a very appealing price for steel. It’s picked up a little bit right now. So, the conditions are there for us to be able to replace to replace new bodies. Hot-rolled coil is coming up a little bit, but we’re very close to the levels that we had a year ago when we closed all those barge orders. So, it’s not going to be again just like wind.
This is not going to be something that every quarter, you get a one-to-one book-to-bill. But I’m confident that the demand is there and we have time. As I said, we have a pretty significant portion of our production already scheduled. We’re going to be cautious in the way we accelerate our ramp-up, but we’re confident in the midterm demand factors for the business.
Alex Hantman: Thank you for the color. Very helpful. That’s it from us today.
Antonio Carrillo: Thank you.
Operator: And it appears that we have no further questions at this time. I will now turn the program back over to Erin Drabek for closing remarks.
Erin Drabek: Thank you for joining us today at our third quarter earnings conference call. We look forward to providing an additional update next quarter.
Operator: And that concludes today’s teleconference. Thank you for your participation. You may now disconnect.
