As operators defer capital expenditures, iron continues to age, but our exclusive survey shows that operators are beginning to expand capital expenditures.

Repair, rebuild, or replace? It’s the conundrum facing many operators throughout the aggregate industry. Over the last six years, the U.S. Geological Survey reports that estimated production levels of crushed stone have dropped by more than 35 percent, while sand and gravel production has decreased by slightly more than 40 percent. Lower production levels have eased hours of operation on equipment, and many operators — faced with uncertain economic prospects — have deferred capital expenditure investments. The result is an increase in the age of equipment operating throughout much of the aggregate industry.

In an exclusive survey, Aggregates Manager asked operators to tell us about their current mobile and stationary equipment, as well as their capital expenditure plans for the next 12 months (see Chart 1 for equipment replacement values of respondents’ existing fleets). A total of 110 operators completed our questionnaire. It should be noted that responses were given prior to the passage of the surface transportation reauthorization legislation, Moving Ahead for Progress in the 21st Century (MAP-21).

The big picture

According to survey respondents, more than one in four (25.4 percent) plan to increase their budget for capital expenditures over the next year. Of those, 64.3 percent anticipate an increase of 1 to 20 percent, with another 28.6 expecting a 21- to 40-percent jump in budgets. Conversely, 13.6 percent of respondents project a decrease in capital expenditure budgets, with most forecasting a 1- to 20-percent drop.

1 in 2 primary crushers has been in operation for more than 7,500 hours.

Almost 35 percent of haul trucks have logged more than 7,500 hours.

Nearly 1 in 3 excavators has more than 10,000 hours of service.

2012 Aggregates Manager Equipment Survey

Not surprisingly, equipment maintenance is the budget category projected to be most likely to experience an increase in spending. A total of 36.6 percent of respondents expect to spend more over the next year to maintain their equipment, while just 2.2 percent predict their maintenance spending will decrease.