The fundamental characteristics of the waste management industry continue to exhibit impressive pricing leverage and steady free cash flow despite a decelerating macro environment. The stickiness of recent CPI-linked price increases, coupled with potentially past peak internal inflation pressures, should more than offset the margin drag of declining recycling commodity prices and provide a tailwind for operating leverage into the new year. Still, rising interest rates and shifting consumer spending away from goods will continue to pressure large volume-generating sectors such as construction, retail, and manufacturing. Against that volume backdrop, the industry maintains a proven cash flow preservation playbook, including reduced overtime and discretionary expenses, equipment optimization, and postponing significant capital outlays.
Industry Update: Refuse and Recycling Fall 2022
