Aggregates Manager Digital Magazine
Issue link: http://read.dmtmag.com/i/772143
by Therese Dunphy | Editor-in-Chief | tdunphy@randallreilly.com FORECAST 14 AGGREGATES MANAGER / January 2017 A fter a year that showed positive, but mixed results, the arrows are overwhelmingly pointing up for 2017, according to the results of the Aggregates Manager 2016-2017 Forecast Survey. The survey assesses production trends for the current year and asks producers their expectations for the coming year. Respondents to the 2016-17 survey reported the most optimistic future business conditions since the survey began tracking industry sentiment in 2004; nearly one in two respon- dents predicted either excellent (13.3 percent) or very good (34.8 percent) business conditions in 2017. At the same time, negative predictions were among the lowest ever given with fewer than 12 percent calling for a fair year, and less than 1 percent anticipating a poor year. Looking back For more than three in four respondents, 2016 was a good year; 11.1 percent described it as an excellent year, 28.9 percent said it was very good, and another 36.3 percent said it was good. There were weak segments as well, however, with nearly one in four respondents saying business conditions for the year were either fair (20.0 percent) or poor (3.7 percent). Those at large operations (3 million tons per year or more) reported strong results. Nearly six in 10 (59.2 percent) of re- spondents at operations that produce more than 5 million tons per year described business conditions as either excellent or very good, while slightly less (57.1 percent) of respondents at operations that produce between 3 million and 5 million tons per year reported the same results. At the other end of the size spectrum, smaller operations (those under 1 million tons per year) were much more likely to report poor business conditions. More than one-third of respondents in operations that produced less than 500,000 tons per year reported either fair (28.6 per- cent) or poor (7.2 percent) business conditions. By commodity, respondents from companies that produce both crushed stone and sand and gravel were the most likely to characterize 2016 business conditions as either excellent (18.4 percent) or very good (32.7 percent). Sand and gravel produc- ers were the next most optimistic, with 11.8 percent reporting excellent business conditions and 35.3 percent describing them as very good. Crushed stone producers were the most reserved, with 5.7 percent scoring 2016 as excellent and 31.4 percent opting for a rating of very good. By region, operators in the South were the most likely to re- port strong business conditions, with 15.7 percent describing it as excellent and an additional 29.4 percent saying it was very good. Operators in the Northeast and West followed closely, with 43.8 percent of those in the Northeast reporting excellent or very good conditions and 38.8 percent of operators in the West opting for the top two business condition ratings. This was particularly good news for those in the Northeast, where the percentage of operators with strong results increased by 7.4 percent. Operators in the North Central region were the least likely to report strong business results, with 31.4 percent falling into the excellent and very good categories. That number, how- ever, is still up 5.5 percent over 2015. Looking ahead Overall business expectations for 2017 are quite strong, but the degree of optimism shifts among the various subgroups. Differences were most notable based on the size of the operation. Respondents in the largest size group (more than 5 million tons) were the most upbeat, with more than one in four (25.9 percent) anticipating an excellent year. Those at the smallest operations (less than 500,000 tons per year) were the most restrained with 1.8 percent calling for a poor year, and an additional 17.9 percent expecting a fair year. By commodity, nearly six out of 10 sand and gravel produc- ers expect either an excellent year (17.6 percent) or a very good one (41.2 percent). Crushed stone and sand and gravel produc- After a year of mixed business ratings, operators are optimistic about their odds in 2017.