Industry Update: Refuse and Recycling Summer 2024
With first-half results from the public operators in the books, the industry margin and cash flow setup for the balance of 2024 remains positive. Subsiding wage inflation, technology implementation, and new equipment deliveries help to subdue operating costs amid a rapidly moderating CPI-based pricing environment. However, with most solid waste volume signals still lackluster, particularly the interest-sensitive C&D and industrial sectors, any sustainable turnaround in organic volume growth hinges on the timing and pace of a Fed easing cycle. In this regard, BMO economists have raised their forecast for the remainder of this year to cuts totaling 75 basis points (previously 50). Another 50 are expected during the 1st quarter of next year before easing into a cadence of 25 per quarter and a total of 200 (finishing at 3.25-3.50%) by the end of 2025.