January 9, 2018
In mid-2004, our staff brainstormed the creation of the Aggregates Manager Industry Forecast. We wanted an analytical way to measure what we felt was taking place in the market. At the time, the industry was recovering from what we would now almost nostalgically describe as a recession. The industry hadn’t hit the production peaks of 2006 and had no indication of the impending trough that would stretch from 2008 to 2010.To capture data, we turned to you, our readers. Each year, you open your doors — figuratively and, sometimes, literally — to let us in and see your operations and glean insights into your operations and management practices. Thanks to all who answer the call and share what’s happening at your sites. You’ve helped us create a forecast that captures the condition of the market in an accurate and dependable manner, year after year. (For the full results of this year’s survey, turn to page 8.)
As you’ll read, 2017 was a very good year for the aggregates industry. From a pure response perspective, business ratings were the strongest we’ve ever received in the 14 years we’ve gathered them. Of course, there are variations depending on region, commodity, and size of operation, but the overall sentiment is overwhelmingly positive. We share all that information so you can benchmark your own results against those operations with the similar characteristics.
In addition to sharing viewpoints on business ratings and production, operators tell us that their confidence in the market is translating to significant investment in equipment. Nearly one in four respondents (23.9 percent) to the Aggregates Manager 2017-2018 Forecast Study said they expect their capital expenditure budget to increase in 2018, with an average increase of 11.6 percent. This anticipated increase marks a second year of increased investments. In 2017, nearly 30 percent of respondents said they boosted their equipment spending, with an average increase of 23.2 percent. Year-over-year growth means more new iron in many operations.
Top categories for increased equipment investment in 2018 include: crushing and screening (33.3 percent), loading and hauling (31.7 percent), equipment and truck maintenance (30.8 percent), conveying and material handling (27.3 percent), and automation (26.4 percent).
By region, respondents in the South (38.5 percent) and Northeast (36.9 percent) are most likely to invest in crushing and screening equipment, while those in the West are most likely to spend more on equipment and truck maintenance. North Central respondents reported a three-way tie (at 30.3 percent) on areas for investment, including crushing and screening, loading and hauling, and equipment and truck maintenance.
With production on the rise, these equipment investments will likely pay dividends as operators prepare to meet the production demands that lie ahead.