Although the homestretch of 2023 is still to come, aggregate producers continue to do the things necessary to ensure they achieve yet another successful year in business.
Has 2023 been a banner year industrywide? Probably not. But the industry is once again exhibiting the resiliency that spurred it to success over the last several years.
Consider the following:
• Demand for equipment remains high. Despite interest rates being at a 22-year high and costs creeping to levels that prompt “are you kidding me” responses, producers aren’t afraid to invest in areas of their operations that need attention.
Producers would probably like another reason or two to feel good about their decision to spend. But they’re confident enough that runway is ahead for construction materials. Thus, they’re willing to pull the trigger when necessary.
• Manufacturers are making their own investments. Some industry manufacturers are building new facilities or expanding existing ones as a response to market demand.
P&Q managing editor Jack Kopanski recently touched on this topic with one equipment manufacturer, who describes equipment demand, in one way, as up fivefold for his company.
• Industry M&A activity continues. While the market environment today isn’t as conducive for doing deals as it was a year or two ago, mergers and acquisitions – largely of the bolt-on variety – are getting done.
One thunderclap deal was even completed before the magazine went to press this month: Summit Materials and Argos USA announced they’ll be combining.
• Aggregate production volumes are near recent highs. What goes up must come down, right? Well, aggregate production slipped for the third quarter in a row when the U.S. Geological Survey (USGS) unveiled that production was down slightly following the second quarter of 2023.
Still, aggregate production in 2022 reached a level it had not seen in 15 years. And it’s not like production is falling off a cliff – it’s holding steady, and producers will tell you that their plants are busy and materials are moving “out the door.”
Final thoughts
With 2023 nearing completion, 2024 is now a regular topic of the conversations and formal interviews I partake in.
Those I’ve engaged of late aren’t expecting 2024 to be off the charts, but they feel good about state of the industry and expect much of the current environment to carry into next year. Take a sentiment from Conn-Weld Industries president Marvin Woodie as an example.
“I think in the next two to three years, we’re still going to see growth but not as rapid as what we’ve seen the past few years,” says Woodie, offering his thoughts about the state of the industry. “It’s still a good place to be.”
Featured photo: P&Q Staff
