Ward Nye
Chairman, President, Chief Executive Officer at Martin Marietta Materials
Thanks Jim. We're finally enthusiastic about Martin Marietta's prospects in 2023 and beyond as we build upon the foundation established in 2022. As indicated in our supplemental materials, historic legislation, including the Infrastructure Investment and Jobs Act or IIJA, Inflation Reduction Act and CHIPS Act are expected to support multiyear demand for our products across infrastructure and heavy nonresidential construction sectors, thereby improving the durability of our business through the current period of macroeconomic uncertainty. Starting first with infrastructure. The value of state and local governments highway, bridge and tunnel contract awards, a leading indicator of future demand, grew 24% to a record $102 billion in 2022.
By comparison, the compounded annual growth rate for combined highway and bridge awards from 2018 through 2021, was 1.7%. State Departments of Transportation or DOTs in key Martin Marietta states remain robustly funded with budgets all above or in line with prior year levels and are well-positioned from a resource aspect and desire perspective to deploy the full allocation of federal dollars received from the IIJA in fiscal year 2023. In addition to the multiyear funding from the IIIJA in December 2022, the President signed the fiscal year 2023 spending package. Included in the package is the Cornyn-Padilla amendment allowing states and local municipalities to use unused COVID-19 relief dollars for infrastructure projects. It's estimated this alone will provide an additional $40 billion of available infrastructure funding for Martin Marietta's top 10 states.
Importantly, investments in our nation's infrastructure maintains broad public support. During the November 2022 election, voters nationwide approved 87% of transportation-related state and local ballot initiatives, representing approximately $23 billion of additional infrastructure funding. A few notable funding initiatives include $15 billion in Texas, $3 billion in San Francisco, $1.3 billion in South Carolina, through a sales tax addition and $1 billion in Colorado, through the renewal of a sales tax addition. We expect this significantly enhanced level of federal, state and local infrastructure investment to yield multiyear demand for our products in this important counter-cyclical end market and drive aggregates shipments to infrastructure closer to our 10-year historical average of 39% of total shipments, as compared to 35% in 2022.
Moving now to nonresidential construction, industrial projects of scale, led by energy, onshore manufacturing and datacenters, continue to lead the segment, accounting for the majority of total nonresidential product shipments. Over the medium term, we expect that enhanced federal investment from the Inflation Reduction Act and CHIPS Act will further support and accelerate post-pandemic secular growth trends. This includes restructured manufacturing and energy supply chains, the electric vehicle transition and continued adoption of digital and cloud-based technologies resulting in robust demand within the heavy nonresidential sector. In our supplemental materials, we outlined examples of both in-process and recently announced large industrial projects in our key markets, reflective of these trends. The aggregates intensive nature and multiyear duration of these projects are expected to extend the nonresidential construction cycle. While we continue to see recovery in pandemic impacted like commercial, retail and hospitality sectors, we expect these gains will moderate as these categories generally follows single-family residential development with a lag.
Shifting to residential. We expect this segment shipments to follow the trend in housing starts, which remain weak. However, we anticipate medium-term improvement as interest and mortgage rates stabilize. Moreover, we expect comparatively positive trends in our Sunbelt markets where there is a significant structural housing deficit due to a decade of underbuilding. As a result, we continue to expect the current housing slowdown will be moderate in our key metropolitan areas as affordability headwinds receed.
In summary, we expect 2023 to be another record year for Martin Marietta. We anticipate flat aggregates shipments at the midpoint of guidance, as we continue to expect increased infrastructure investment, coupled with robust activity from heavy nonresidential projects of scale, we'll largely insulate product shipments from a residential slowdown and a related moderation in light commercial construction. We now expect aggregates pricing growth of 13% to 15%, underscored by attractive 2022 exit rates, early 2023 pricing momentum and a steadfast commitment to our value over volume commercial strategy, which should more than offset continued inflationary pressure and result in expanded gross margins and accelerated unit profitability growth.
Combined with contributions from cement, downstream operations and Magnesia Specialties, we expect consolidated adjusted EBITDA of $1.8 billion to $1.9 billion or a 15.6 percent growth year over year at the midpoint. As a reminder, this guidance excludes the businesses classified as assets held for sale. To conclude, we are proud of our 2022 record-setting performance in a dynamic and challenging environment. Equally, we're confident about our 2023 guidance and our ability to navigate the current macroeconomic headwinds, while further demonstrating the resiliency of our proven aggregates-led business model. As such, we expect the fourth quarter commercial and margin expansion momentum to accelerate in 2023, resulting in attractive earnings growth and superior value creation for our stakeholders. If the operator will now provide the required instructions, we'll turn our attention to addressing your questions. Thank you.
