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Page 76 of 123 ROCK products • August 2018 • 75 Aggregates Industry Almanac Equipment Update Approximately 21 percent planned to spend $500,000 to $1 million, a nice jump from 2018 when 16 percent chose that dollar range. And what do they plan to buy? • Equipment upgrades, 59.76 percent. • New equipment, 58.54 percent. • Plant additions, 34.15 percent. • Used equipment, 25.61 percent. • Mine development, 23.17 percent. • Technology upgrades, 21.95 percent. • Permitting and bonding, 20.73 percent. • New plant construction, 19.51 percent. • Quality control, 13.41 percent • Exploration, 10.98 percent. • New mine start up, 10.98 percent. • Reclaim systems, 8.54 percent • Other, 1.22 percent. Over and above consumables, such as oil, safety supplies, maintenance equipment, tires and replacement parts, the top equipment areas being considered for 2018 are: • Motors, 52.44 percent. • Pick-up/utility vehicles, 50.00 percent. • Pumps, 40.24 percent. • Material handling/conveying equipment, 46.38 percent. • Screening and sizing equipment, 46.30 percent. • Drilling and blasting suppliers/services, 32.93 percent. • Excavators/loaders/dredges 39.02 percent. • Portable crushing/screening plants, 29.30 percent. • Washing and classifying equipment, 29.24 percent. • Haul trucks, 24.44 percent. • Scales, 24.39 percent. • Breakers, 24.33 percent. • Crushers, 21.95 percent. • Automation products, 21.95 percent. • Drones, 14.63 percent. • Energy management, 10.98 percent. • Frac sand equipment, 3.66 percent. • Other, 2.44 percent. Manufacturing: A Warning for 2019 It's been a banner year so far for the industrial sector, but will manufacturing continue to help carry the U.S. economy and drive solid growth through the remainder of 2018? The short answer is yes. However, according to economist Eli Lustgarten of ESL Consulting, while the near-term outlook for both manufacturing and the overall economy is strong, there is growing concern about 2019 and beyond. "There are a lot of underlying issues that make economists and businesspeople nervous," said Lustgarten, who outlined his thoughts on the latest manufacturing, agriculture and construction market data at the recent Association of Equip- ment Manufacturers "Thinking Forward" event in Chicago. "Not for 2018, but for 2019." A number of warning signs suggest significant economic growth will not continue into next year. According to Lust- garten, consumer spending appears unsustainable and underlying data suggests many Americans are currently living beyond their means. Other prevalent factors Lustgarten and fellow economists believe could hinder future growth include: • Higher inflation. • Rising borrowing costs. •  More stringent immigration policies, which could limit labor availability. • The rising fear of trade protectionism due to recent tariff announcements. • The uncertain future of NAFTA. Economic growth abroad is also poised for a slowdown in 2019. According to Lustgarten, the latest data suggests Chi- na's outlook isn't as promising as hoped, monetary changes indicate future tightening, oil prices are rising, and trade issues are becoming problematic. The U.S. construction equipment market is currently expe- riencing a solid upturn, largely driven by the rise of rental. According to Lustgarten, percentage of sales from rental has risen from 35 percent at the beginning of the decade to more than 55 percent today. Other economic data related to construction is mixed. Hous- ing has been slow to recover from the collapse proceeding the Great Recession last decade, as has non-residential con- struction spending. However, there is reason for optimism to be found in the fact that spending on new construction machinery has accelerated greatly, and overall construction expenditures have recovered as well. According to Lustgar- ten, in 2008 and 2009 construction equipment spending fell by 70 percent, but gains of 38 percent in 2011 and 25 percent in 2012 have helped the sector bounce back over time. 2018 looks to be a good year for the farm equipment sector, which is especially welcome news on the heels of a solid 2017. Last year, farm equipment sales began to stabilize after a lengthy period of decline. "We're in the position where the farm equipment sector is sort of stable, and in fact, is even improving this year," said Lustgarten. Unfortunately, the same can't be said for commodities mar- kets. The supply of U.S. crops far exceeds demand right now, and it's leading to significant year-to-year carryovers and depressed prices. Cutting production will be key for ag mar- kets in the short term, as is finding ways to raise demand. 2018 looks quite good, but economic growth in the U.S. is poised to slow as soon as next year. However, according to Lustgarten, the passage of a timely infrastructure bill would certainly help to improve the long-term outlook for the man- ufacturing, ag and construction sectors. "Policies matter, and an infrastructure bill would actually create a mini-boom," he added.

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