Operator: All right. Thank you. Our next question comes from the line of Phil Ng. Phil, please go ahead.
Collin Verron: Hey, good morning. This is actually Collin on for Phil. I appreciate the high level commentary around the different end markets. But can you put some number ranges around your preliminary view for volumes in 2024, with your peers talking about aggregates volumes being flat to download single digits next year? I guess, is this something also achievable by Summit? Or do you anticipate some variance either to the upside or the downside?
Anne Noonan: Yeah. So, Collin, thanks for the question. Let me start by saying we are refining our numbers, so we’ll come out with a much more clear guide to you in February, as we always do. But I’ll kind of share with you where our mind is right now around volumes. So let’s start with the one we have the most visibility, which is in the public side. You know, this year we saw mid-single-digit growth, solid mid-single-digit growth. That pipeline is only increasing. So public, we see the IIJA dollars flowing through. We see that in our major Texas and Kansas states, and we’re actually seeing that happen. So definite proof that has started and will accelerate only into 2024. The other thing we look at is our contract highway and paving awards in public, which are up 27% year-on-year, which is seven percentage points above the national average.
So that’s all starting to play through. And then if we look at our state DOT budgets for 2024, they’re up 14% for our top five states, or 4.5 billion. Like, Texas alone is up 24% to 18.5 billion. Utah is up 2.9 billion. Kansas is up 2.3 billion, Missouri around 4.1 million — billion, and then Virginia is at 8.1 billion. So very strong pipeline. The whole point of giving you that data is to prove that and then our backlogs, which is really what we have in hand and I always use Texas as our bellwether state on how we’re doing on backlogs. They’re nearly double what we had last year and they’re building. So bottom line for all that data I gave you was public is very strong. We continue to see that into 2024. Let’s switch a little bit to residential.
So residential, we believe we’re cautiously optimistic, it’ll stabilize if not recover. But it’s a little different by our end markets. So in Houston, we’re seeing that recovery come back faster. You can see that in the form of single-family permits are improving, that trend decline is improving. And actually see if you look out on forecasts on single-family permits, them turning positive in 2024. We actually see that in our business. And, you know, the Texas market is held up by a very strong economy both from an energy perspective, household formation and population growth. So we expect the Houston market to continue to recover faster. Salt Lake City, a little bit slower. They’re the larger builders are faring better than the regional builders.
But again, single-family permits, the trend is improving there. So you could potentially see some recovery. But our planning stance is kind of longer trough there. And then finally our Phoenix market in residential. You know, it’s actually we’re not as over-indexed on residential, there, we’re heavier commercial, which is doing extremely well. But even the residential there, the single-family permit trend is improving as well. So, you know, bottom line on residential, stabilize if not recovery. But the point I’d give you on residential, which I think is very important is we were down 20% this year. And the reason we’ve kept our margins up and done very well on our pricing is we’re in the right markets with advantaged assets and leading positions and we’re overall very bullish on residential in the long-term.
So, you know, we can see that being a swing factor in ’24. And then let me move to non-residential which I think has, you know, some real positives to it. Just to remind you, we’ve had a flat stance on that and it’s played out pretty much as expected with the heavy from — onshoring and manufacturing and energy offsetting the light non-residential. We’ve seen that play out. We feel we have very good advantage positions for non-residential. If you look at our Southeast markets in Carolinas and Atlanta, they’re growing heavily with the EV battery factory. And then if you think about along our river markets and the Gulf driven by a lot of the energy verticals and then Phoenix is the epicenter for semiconductor manufacturing. And actually if you look at the funding that’s come from the IRA and Chips Act so far, over 60% of that has gone into our top states.
So we’re very encouraged by that. The other thing we love about the non-residential is they’re very ags and cement intensive. And so we’re getting that materials portfolio strength compound itself over the years. And then you have the multiplier effect as we look out over time of building out single-family homes and further light non-residential. So all that’s to say is, we can see a path to maybe flat growth next year. You know, it will be, really the drivers will be — we are very positive on public. Residential, we could get that recovery. That would be a driver upwards. And then non-residential, I would say start from a flat perspective, Collin, and then we’ll update our pipeline to you, which is quite rich right now on the non-residential side.
We’ll give you more specificity on that when we [Technical Difficulty]
Operator: [Technical Difficulty] comes from the line of Anthony Pettinari from Citi. Anthony, please go ahead.
Anthony Pettinari: Good morning.
Anne Noonan: Good morning, Anthony.
Anthony Pettinari: You know, you got – hey you got good ag — pricing and ags in 3Q, and I think organic volumes were down 7.5%. You know, you talked about dynamic pricing and value pricing. I’m just wondering, are you walking away from any business, and if so, would that be, you know, any component of that 7.5% decline? And then, maybe just an add-on question, I guess your expectation is for cement pricing to outpace aggregates pricing in ’23. I’m not sure if there’s too much to read into that, you know, if those markets are just a little bit stronger or maybe you just have more of an opportunity there from a commercial excellence perspective or if there is any color you can give there?
Anne Noonan: Yeah. So, Anthony, let me address ags volumes and pricing in Q3, first of all. So obviously they were down because residential has been down. So that’s a big driver of your ags being down. The other point I point to really answer your question around pricing is in our British Columbia market. There we are leaders in pricing and, you know, we tend to lead and we’ll lose a little bit of volume and then it will come back. That’s just the way it works every year. We saw the trend from Q2 to Q3 improve on our volumes there. So we’re positively encouraged that that will turn around. That being said, price — the value of our pricing way outweighed that volume decline in Q3 on aggregates. Cement, I think you just read into that more that we started from such a high point in January.
And cement pricing, if you recall, we had to go very high on our pricing. It was like a $17 a ton increase in January, followed by a mid-year $10 a ton. And that was really because as we were in cement pricing in 2023, we had those really high energy costs at the beginning of the year with very strong supply-demand dynamics, but generally cost inflation was quite high. So we had very strong realization. Our mid-year price increase is 70%. And frankly, as we go into 2024, we’re going to go out with that $15 a ton, and I’d expect that same realization. So cement, the supply-demand dynamics stay strong. Our costs are going to be higher. Again, I’d — maybe have Scott talk a little bit about our cement costs as we go into, we believe this will keep pricing up frankly in 2024 because we have some significant increases in costs that are a little different in ’24 than ’23.
So Scott, maybe you want to talk a little about that.
