Aggregates Manager Digital Magazine
Issue link: http://read.dmtmag.com/i/829086
by Therese Dunphy, Editor-in-Chief tdunphy@randallreilly.com SPECIAL REPORT SPECIAL REPORT • 8 T ime and again, operators have indicated that 2017 is shaping up to be a strong year for the aggregates industry. Through both our monthly Aggregates In- dustry Outlook polls and our annual Forecast Survey, optimism has been on the rise. And, that trend continues with our exclusive research into equipment acquisition planning. More than 40 percent of respondents to our Equipment Strate- gies Survey say they will increase capital expenditure spending, compared to 29.1 percent who reported the same expectation through last year's survey. And, for the first time since our sur- vey debuted in 2012, more than one in 10 respondents expects capital expenditure spending to increase sharply. "Many companies are replacing equipment that they kept longer than normal during the economic downturn," notes one respondent, while another says, "We are preparing to trade in old plants on new larger capacity plants." Bigger budgets According to survey respondents, 10.6 percent plan to sharply increase their capital expenditures budget during the next 12 months (see Figure 2). This level of anticipated investment is more than double what was reported in 2016 (3.9 percent) and five times what was reported in 2015 (2.1 percent). In addition, more than three in 10 (30.1 percent) say they will increase bud- gets somewhat, while slightly over half (52.2 percent) say their budgets will remain the same. A combined 7.1 percent say they will have smaller budgets this year — approximately half the number of respondents who reported smaller budgets in 2016. Among producers who say they will have larger bud- gets, nearly two-thirds (65.3 percent) say the increase will be between 1 and 20 percent. An additional one-fifth (21.7 percent) say budgets will bump by 21 to 40 percent. Just over 2 percent anticipate that budgets will increase by 41 to 60 percent, while more than 6 percent say they will rise by 61 to 80 percent. Finally, one in 25 (4.3 percent) respondents says budgets will jump by 81 to 100 percent. Of those who anticipate a decrease in spending, half of re- spondents say the decrease will be 1 to 20 percent. More than a third (37.5 percent) say budgets will decrease by 61 to 80 percent, while an additional 12.5 percent expect budgets will decline by 81 to 100 percent. Top equipment on the wishlist Automation/technology is the category most likely to see additional investment (see Table 1). More than 45 percent of respondents say they expect to spend more on automation When it comes to pulling the trigger on a purchase, parts and service reign supreme.