Materials Sector Earnings Forecast to Rise 20% in 2026 Amid Steel Tariffs

• Materials sector earnings forecast to rise 20% in 2026, second-best among sectors after technology.

• Metals and packaging segments expected to lead with over 30% profit growth due to tariffs and order surges.

• Steelmakers like Nucor report strong backlogs from infrastructure and energy projects, per Bloomberg Intelligence data.

Materials sector earnings set to climb 20% in 2026, fueled by tariffs, steel price hikes, and packaging demand. Explore top performers like Nucor and key trends driving this rebound—stay ahead in investing today.

What is the materials sector earnings outlook for 2026?

Materials sector earnings are forecasted to grow by about 20% in 2026, according to Bloomberg Intelligence, representing the group’s best showing in five years and placing it just behind technology. This surge is propelled by robust trade protections, particularly Section 232 tariffs on imported steel, which are empowering U.S. producers to maintain higher pricing power. Additionally, a notable uptick in consumer goods demand is benefiting packaging firms through increased orders for boxes and cans as food brands leverage discounts to boost volumes.

How are tariffs and backlogs boosting steelmakers’ profits?

Tariffs on imported steel are providing U.S. mills with greater pricing control and displacing foreign competition, as noted by Richard Bourke of Bloomberg Intelligence. He emphasized that as long as 50% Section 232 tariffs—originally from the Trump era—remain, domestic producers will continue gaining market share. Nucor, with its broad product range and excess capacity, has highlighted a strong 2026 order book fueled by projects in energy, infrastructure, data centers, and manufacturing. In a December update, Nucor indicated that current policies should foster gradual business improvements. Steel Dynamics has similarly reported an expanded backlog, anticipating lower interest rates to spur infrastructure investments and onshoring of production. Bourke pointed out that many contracts are lag-based, delaying revenue recognition until 2026 but ensuring solid future earnings. North American mills operating near full capacity, as observed by RBC analyst Matthew McKellar, further support potential price increases.

The packaging subsector faces mixed pressures, with tariffs acting more as a headwind, yet client promotions from companies like General Mills and PepsiCo are driving volume growth. Truist analyst Michael Roxland credits this for lifting suppliers such as Amcor. Jefferies analysts project easier year-over-year comparisons and returning consumer confidence to aid the second half of the year. Packaging giants like Smurfit WestRock and Ball Corp. are spotlighted for their potential.

Frequently Asked Questions

Which companies are expected to lead materials sector earnings growth in 2026?

Steelmakers Nucor and Steel Dynamics top the list, with Nucor citing diverse projects and strong backlogs for robust 2026 performance. Packaging leaders like Smurfit WestRock, Ball Corp., and Amcor anticipate over 30% profit jumps from volume increases and synergies, per Bloomberg Intelligence and company reports.

What factors are driving the materials sector rebound in 2026?

Voice search optimized: Trade tariffs protect domestic steel pricing, backlogs fill order books for infrastructure and energy, and packaging demand rises from discounted consumer goods. Lower interest rates and supply constraints add upward pressure on earnings across metals, chemicals, and construction materials.

Key Takeaways

• 20% earnings growth projected for materials in 2026: Best in five years, driven by tariffs and demand shifts, outpacing most sectors except tech.
• Metals and packaging to exceed 30% gains: Steel price stability and consumer volume boosts position Nucor, Steel Dynamics, and Amcor as frontrunners.
• Monitor interest rates and supply capacity: Rate cuts could unlock construction projects, while tight mill operations support further pricing power.

Conclusion

The materials sector earnings outlook for 2026 paints a picture of significant recovery, with 20% growth anchored by tariff protections, steelmaker backlogs, and packaging volume surges. Authoritative insights from Bloomberg Intelligence analyst Richard Bourke and company executives underscore the role of trade policies and capacity constraints. Chemicals and construction materials also eye rebounds via lithium demand and rate relief, as seen with Sherwin-Williams and CRH. Investors should watch these dynamics closely, positioning for a sector poised to deliver value amid evolving economic conditions.

Packaging and Chemicals Strategies Amid Challenges

Packaging firms are adapting through cost efficiencies and synergies rather than broad economic uplift. Amcor’s CEO Peter Konieczny outlined plans for 12% to 17% adjusted profit growth—its strongest in five years—via internal optimizations. International Paper, after four years of profit declines, anticipates a turnaround but cautions on persistent weak demand tied to inflation, trade, and housing slowdowns. CFO Lance Loeffler noted tight North American supply-demand balances, suggesting even modest demand sparks could ignite business momentum.

Construction and Specialty Chemicals Poised for Rate-Driven Gains

Beyond core metals and packaging, chemicals expect expansion after three tough years, while construction materials rebound from 2025 dips. Sherwin-Williams stands to gain from rising home sales, per Citigroup analyst Patrick Cunningham. Albemarle benefits from lithium price escalation linked to energy storage needs. For CRH and peers, declining rates could ease borrowing and accelerate stalled residential and commercial projects, as Bloomberg Intelligence’s Sonia Baldeira forecasted. Overall, these elements converge to signal a promising era for the materials sector, blending policy support with operational resilience.