Titan Group cautiously optimistic despite geopolitical risks

Belgium-based Titan Group remains cautiously optimistic about 2026 despite elevated geopolitical risks, including the ongoing Middle East conflict, which could drive higher energy prices and renewed supply chain uncertainty, the company said in its earnings statement March 19.

Titan added that it has no direct exposure to the affected regions, but conflict-driven developments are anticipated to impact market trends and increase inflationary risks.

"Regional prospects for our markets remain mixed, with the US benefiting from resilient domestic demand in particular infrastructure, while Europe's recovery is likely to remain more fragile given its greater exposure to energy price volatility," the company said.

For the US, Titan said the construction market is expected to remain broadly stable in 2026, amid elevated financing costs, persistent input inflation, and ongoing labor constraints. Recent developments in energy pricing add further uncertainty to an already complex macroeconomic environment. Mortgage rates are expected to remain at elevated levels, continuing to weigh on housing affordability and residential activity, which is likely to remain subdued.

"As a result, the anticipated inflection point in residential construction may be pushed into 2027, with strong longer-term support from a structural housing supply gap," the company said, adding, "Industrial construction is expected to remain resilient in 2026, driven by manufacturing, energy and tech investments, mainly in the South."

Greece's construction sector is set for moderate growth, supported by resilient private demand and strong public investment. With GDP expected to grow in 2026-27 at twice the EU average, momentum in Greece is underpinned by RRF funding, supporting investment activity, the company's outlook said. Residential construction remains buoyant, driven by a housing shortage and new supply-side policies. Public infrastructure will lead growth, backed by EU-funded transport, energy, and post-disaster reconstruction projects.

In Southeastern Europe, the company expects the construction sector to stabilize at high levels, following several years of robust expansion. Residential construction remains a key driver of demand, supported by urbanization, housing shortages and diaspora-related investments; however, elevated financing costs are tempering new homebuilding. Public infrastructure is expected to be the most dynamic segment, underpinned by large-scale transport and energy projects supported by the EU and multilateral funding.

In Egypt and Türkiye, construction sectors are set for moderate growth, driven by expansive development pipelines -- Egypt's alone exceeding $565 billion -- despite ongoing affordability and financing challenges, the company said. Easing inflation and improved FX stability should support Egypt's economy, while Türkiye benefits from resilient domestic demand and a gradual policy shift.

"Residential construction remains a key growth engine in both countries, fueled by population growth, housing shortages, and large-scale reconstruction (post-earthquake) and renewal programs, while cost inflation and financing constraints persist," according to the statement.

Titan's 2025 sales grew 6.4% year over year on a like-for-like basis to Eur2.67 billion, adjusted for Eur136 million in FX and scope changes, with improved volumes in core materials and firm pricing. Sales grew across all regions: the US, Greece, Southeast Europe and Eastern Mediterranean.

Ready-mix volumes increased by 6%, supported by the construction momentum in Greece and resilient demand in the US, reaching 6.4 million cu m at the group level by year-end on a like-for-like basis. Aggregates volumes also grew by 9% to 23.7 million mt, driven by strong demand in Greece and increased demand in the US, particularly Florida, supported by capital investments made in 2024. Volumes of cementitious materials, including fly ash and pozzolan, increased, alongside higher mortar volumes in Greece.

Sales for Greece and Western Europe increased 12.9% year over year on a like-for-like basis to Eur518.8 million. In Southeastern Europe, sales remained flat year over year on a like-for-like basis at Eur418.5 million. In the Eastern Mediterranean, sales surged 43.6% year over year on a like-for-like basis to Eur250.8 million, the company said.

Platts, part of S&P Global Energy, assessed Platts CEMDEX at $54.50/mt FOB Turkey and the Platts Clinker Turkey price at $45.50/mt FOB on March 17.