December Aggregates Industry Outlook surges with extended production season

Therese Dunphy

December 15, 2017

Aggregates Industry Outlook

Aggregates Industry Outlook Index

The December Aggregates Industry Index surged to an overall score of 133.44, a 9.87-percent increase from November. Gains for the month nearly offset decreases reported over the previous three months. Good weather at the end of the year helped some operators extend their season. While the commercial market continues to perform well, infrastructure investments vary from state to state. Operators are increasingly calling on the federal government to take action on a long-term program.

Comments:

While the commercial market seems stable, the lack of action on the Highway Trust Fund and state funding is concerning.

—Bill Schmitz, Vice President, Quality Control and Sales, Gernatt Asphalt Products, Inc.

May we all count our blessings and spend time with our loved ones as we reflect back on the year and plan for next year.

—Daryl Zeiner, Sales Manager, The H&K Group

For New England-area aggregate businesses, the greatest impact on sales during the last quarter of any year is the weather. This year’s warm and dry conditions through the fall and into December provided optimal conditions to extend aggregate and asphalt production for a longer period that usual, thus increasing sales. Now, we are hoping for snow (pennies from heaven) for the first quarter of 2018!

— Karen Hubacz-Kiley, Chief Operating Officer, Bond Construction Corp.

California kicked off the holiday season with a gas tax increase due to the Road Repair and Accountability Act passed earlier in 2017. The Sacramento area is expected to benefit from significant repair and resurfacing projects, primarily on US-50 and I-5 in 2018.

— Deric Harrington, Production Superintendent, Specialty Granules, LLC

Working with frac sand customers in Texas and the Midwest, all are very positive and selling sand before they get to them. From my small seat…we are renting, selling, and recommending machines and machine fleets to this industry segment more than we have in the past five years.

— Jason Hurdis, Senior Market Professional, Caterpillar

Industry outlook for the next year
December responses for the overall industry outlook climbed 7.2 percent from November expectations — the same margin of growth as compared to December 2016. Year-end responses were, however, among the lowest of 2017.
Company outlook for the next year
In terms of expectations for their own companies, respondents were slightly less optimistic than with the industry as a whole. In December, they reported a 6.6-percent increase in expectations, compared to November. This month’s results are 5.8 percent higher than those reported in December 2016.
Outlook for monthly sales
Warmer-than-expected temperatures led to an extended selling season, which is underscored by December’s 11.4-percent increase in monthly sales ratings compared to November. Compared to December 2016, the business sentiment index is up 12 percent and registered the highest response of the year.
Outlook for quarterly sales
Anticipated sales for the next quarter are up 10.2 percent from November ratings — the same improvements show between December 2017 ratings and those of a year prior, but are lower than most of the year.
Outlook for sales for the next half
Expectations for sales during the next six months enjoyed double-digit growth from November — up 10.5 percent. They were also 9.0 percent higher than those reported during the same month a year prior.
Outlook for annual sales
Annual sales enjoyed the most growth in this year’s month-over-month forecast, up 12.3 percent from November. December results are also up 9.2 percent compared to a year prior.
Editor’s note: To join our panel, email Editor-in-Chief Therese Dunphy at tdunphy@randallreilly.com.

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