Aggregates Manager Digital Magazine
Issue link: http://read.dmtmag.com/i/440030
AGGREGATES MANAGER January 2015 10 by Therese Dunphy, Editor-in-Chief tdunphy@randallreilly.com Rock Roll O ptimism seems to be flowing in the aggregates industry. Whether opera- tors have adjusted to a new normal or the construction materials market is truly well on its way to recovery may be open to debate, but operators responding to the 2014- 2015 Aggregates Manager Forecast Survey re- ported the best business results since 2006. To put current results into context, consider the peaks and valleys experienced during re- cent years. At the market high in 2006, the U.S. Geological Survey reported annual aggregates production of 3,428 million short tons and 45.1 percent of forecast survey respondents catego- rized the annual business results as either excel- lent or very good. In 2009, however, the market plummeted. The U.S. Geological Survey reported annual aggregates production of 2,202 mil- lion short tons, and only 9.1 percent of forecast survey respondents described annual business results as excellent or very good. Through the third quarter of 2014, the U.S. Geological Survey reported aggregates produc- tion of 1,805 million short tons — an increase of 8 percent over the same period a year before. And 35.5 percent forecast survey respondents termed 2014 business ratings as either excellent or very good. At the same time, the percentage of operators describing business ratings as poor fell to 4 percent, the lowest in that category since 2006 and a whopping 23.3 percent lower than the highest percentage reported in this cat- egory during 2009. These results beat last year's forecast predictions by one of the widest spreads seen throughout the 11-year history of the Aggregates Manager Forecast Survey. Typically, the estimated and actual ratings are within a couple percentage points of one another. This year, actual results were, as a whole, consider- ably better than predictions. Excellent: 3.8 percent forecast; 8.9 percent actual (+5.1 percent difference); Very Good: 21.9 percent forecast; 26.6 percent actual (+4.7 percent difference); Good: 47.6 percent forecast; 40.3 percent actual (-7.3 percent difference); Fair: 23.8 percent forecast; 20.2 percent actual (-3.6 percent difference); and Poor: 2.9 percent forecast; 4.0 percent actual (+1.1 percent difference). From a regional perspective, operators in the South were the most likely to report positive results with more than four in 10 (41.9 percent) describing the year as either excellent or very good. At the other end of the spectrum, opera- tors in the West were the least likely to report the two strongest business ratings results (18.1 percent) and the most likely (13.6 percent) to report poor business results. By primary product, sand and gravel operators were the most likely to describe 2014 business ratings as excellent or very good. A total of 44.5 percent opted for those two ratings with no sand and gravel operators recounting poor busi- ness conditions. In comparison, 32.8 percent of crushed stone & sand and gravel operators and 31.5 percent of crushed stone only operators reported business ratings of excellent or very good. Looking at business results by operator size, operators with annual production of more than Operators report best annual business results since 2006 and seem bullish on expectations for this year. &