Questions about what’s next for the U.S. economy are top of mind lately for business leaders.
By Cole Rosengren, Maria Rachal, Megan Quinn, Waste Dive
The waste and recycling industry, like other industries, has experienced tight labor availability, rising fuel costs, and significant equipment delays. Facing those economic pressures, major companies in some other industries have cut guidance during the second-quarter earnings cycle.
Yet waste companies almost universally raised their 2022 guidance this quarter, with varying degrees of optimism about their ability to weather whatever may be coming next — recession or otherwise — and capitalize. And a newly released July jobs report showed strong signs for the economy. Here’s what top executives had to say about their economic expectations for the near future.
Tracking the waste and recycling industry’s mergers and acquisitions boom
The amount of acquisition spending and consolidation is rivaling historic levels. Follow along with Waste Dive’s running list of dozens of deals from throughout the U.S.
WM
WM CEO Jim Fish, speaking during the earnings call on July 27, said special waste from industrial activity as well as C&D (which is a much smaller piece of the company’s business) could both be leading indicators of a downturn, but neither is showing signs of softening in the months ahead. Fish also noted that a recent report from the company’s 16 area vice presidents gave little to no indication of overall waste volumes slowing down in July.
Overall, Fish described some 75% of the company’s business as resilient to a downturn. Executives also expressed confidence about maintaining pricing trends if that occurs.
“I do think there is a recession coming. I’m not going to kind of buck the trend there because everybody is saying there’s one coming. But I just feel like we’re in a great industry to weather the storm and, ultimately, with some of the things we’re doing with technology and reducing our labor dependency, come out of this thing better than anybody else,” Fish said.
WM executives said they believe wage inflation may have peaked for the moment — due, in part, to heightened wage increases made last year — but they said hiring and retention remain challenging. Company leadership also highlighted how an ease in supply chain challenges could improve the company’s outlook.
“We’re hopeful that in the back half of the year, we start to see a pretty significant ramp-up there in the vehicles that we’ve ordered. That’s a pretty important part of the inflation picture because … maintenance cost is not insignificant as a cost line item. And that obviously is impacted as you’re having to keep older trucks in the fleet,” said Fish.
If you liked this post you’ll love our daily environmental newsletter, EnviroPolitics. It’s packed with the latest news, commentary, and legislative updates from New Jersey, Pennsylvania, New York, Delaware…and beyond. Don’t take our word for it, try it free for an entire month. No obligation.
