Aggregates Manager Digital Magazine
Issue link: http://read.dmtmag.com/i/829086
SPECIAL REPORT • 10 this year's survey. Once again, they say reliability is the most important consideration when making an equipment purchase. More than three in four (76.4 percent) described it as extremely important — a 10-percent increase over last year. Other top considerations were safety (73.2 percent), parts availability (71.7 percent), and dealer service (71.6 percent). See Table 2. Another issue that respondents noted was the ability to fi nance new equipment. This is a departure from the normal trend of banks offering loans when the market is strong, while captive fi nancing steps in when the market is slow. "New equipment loans are diffi cult to get," says one respondent. "Banks are more interested in covering themselves than they are in helping out businesses." Parts availability also drew numerous anecdotal responses, with multiple operators saying they struggle to fi nd a balance between their own spare parts inventory and the dealer's. While some are trying to ensure their vendors carry parts for their new equipment, many cite it as their biggest equipment challenge. Others lamented about service. One notes dealers are slow to provide warranty service while another said that his equipment is diffi cult to maintain when moving from one area to another due to poor communication between dealers. While some operators note improving dealer service, it's clear that many are willing to switch brands to have their service needs met. Over the last three years, the percentage of respondents who describe the equipment manufacturer as extremely important in their purchasing criteria has contin- ued to fall — down from nearly 30 percent in 2015 to 22.8 percent this year. One respondent summed it up: "There is a lot more choice now when it comes to selecting a quality machine. Whereas in the past, there were typically one or two dominant manufactur- ers for a particular type of machine, it seems that, in many cas- es, the other manufacturers have leveled the playing fi eld when it comes to quality. The manufacturer or brand of the equipment isn't as important a factor now as is the dealer service and parts availability, and the costs of those parts and service." Figure 1. Budget for capital equipment expenditures over the next 12 months Figure 3. Percentage of capital expenditures toward long-term assets Figure 2. Budget expectations for next 12 months Nearly 30 percent of respondents have equipment fl eets valued at more than $25 million. More than 40 percent of respondents plan to increase capital expenditures in the next 12 months, a 10-percent increase over 2016 responses. Figure 2 Increase somewhat Stay about the same Decrease somewhat Decrease sharply Increase sharply 10.6% 30.1% 52.2% 6.2% 0.9% Figure 3 1-20 percent 81-100 percent 21-40 percent 41-60 percent 61-80 percent 50.4% 4.4% 24.8% 7.1% 13.3% Figure 1 $1,000,001 to $5 million $5,000,001 to $10 million $10 million to $25 million More than $25 million Not sure Less than $1 million 16.9% 17.7% 11.5% 15.0% 9.7% 29.2% About the survey A total of 113 producers responded to our Equipment Strategies Survey, which was sent out in March. Of those who responded, more than a third were owners or offi cers and another third were titled executives, production managers, or plant superintendents. The remainder fell into a variety of categories including quality control and technical managers, maintenance managers, and production personnel.