Aggregates Manager

August 2012

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As operators defer capital expenditures, iron continues to age, but our exclusive survey shows that operators are beginning to expand capital expenditures. By Therese Dunphy, Editor-in-Chief Aggregate Equipment R epair, rebuild, or replace? It's the conun- drum facing many operators throughout the aggregate industry. Over the last six years, the U.S. Geological Survey reports that estimated production levels of crushed stone have dropped by more than 35 percent, while sand and gravel production has decreased by slight- ly more than 40 percent. Lower production levels have eased hours of operation on equipment, and many operators — faced with uncertain economic prospects — have deferred capital expenditure investments. The result is an increase in the age of equipment operating throughout much of the ag- gregate industry. In an exclusive survey, Aggregates Manager asked operators to tell us about their current mobile and stationary equipment, as well as their capital expen- diture plans for the next 12 months (see Chart 1 for equipment replacement values of respondents' existing fleets). A total of 110 operators completed our questionnaire. It should be noted that responses were given prior to the passage of the surface trans- 18 AGGREGATES MANAGER August 2012 The big picture portation reauthorization legislation, Moving Ahead for Progress in the 21st Century (MAP-21). According to survey respondents, more than one in four (25.4 percent) plan to increase their bud- get for capital expenditures over the next year. Of those, 64.3 percent anticipate an increase of 1 to 20 percent, with another 28.6 expecting a 21- to 40-percent jump in budgets. Conversely, 13.6 per- cent of respondents project a decrease in capital expenditure budgets, with most forecasting a 1- to 20-percent drop. Not surprisingly, equipment maintenance is the budget category projected to be most likely to experience an increase in spending. A total of 36.6 percent of respondents expect to spend more over the next year to maintain their equipment, while just 2.2 percent predict their maintenance spend- ing will decrease. Anecdotally as well as statistically, maintenance, maintenance, maintenance is the mantra of survey

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