Rock Products

FEB 2019

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30 • ROCK products • February 2019 www.rockproducts.com Issues with qualified labor was a mantra repeated again and again. Here are some comments from survey respondents: • "Labor is the biggest issue (Finding people to work). The future generations do not want to work outside and in construction." •  "Lack of qualified operators and employees. Vocational classes and schools focus. Improve salary ranges." • "The greatest impact I see for our industry will be a short- age of trained workers." • "The labor-force needs for the industry are high and avail- able labor pool is nonexistent." Permitting was on the mind of some survey respondents. One told us the main impact issue is, "More stringent per- mitting requirements as well as more NIMBY mentality from neighboring communities." Another said, "Inability to zone and permit future reserves and greenfield operations. Aggregates reserves and operations should be protected and exempted from local zoning regulations. Statewide permit- ting should apply." Politics is never far from the discussion when it comes to what will impact the aggregates industry. One respondent said, "A Capital Bill for Illinois. With the new Democratic governor coming in, companies are optimistic that a Capital Bill will finally get done in this state. There is both public and private work slated to go in 2019. I think we need to be careful going into 2020 election year that the economy may stumble due to uncertainty in the country." One prognostica- tor said, "The Democrats in charge of the House will slow the economy, the Republicans need to retake the House in 2020, Trump should win the presidency, and the Republicans add seats to the Senate." And at the end of the day, infrastructure funding is always top of mind. One respondent said the main impact issue is: "Passing or not passing continued infrastructure improve- ment bills. Most companies are prepared but waiting to see what happens." Another noted, "Lack of transportation fund- ing. Fuel/user tax increases. This is unsustainable." Equipment Capitalization With a continued hope for a new federal infrastructure bill, producers plan to spend some money in 2019, building on 2018. Just over 43 percent of respondents said they increased capital spending last year. This year approximately 29 percent of the survey group plan to spend up to $500,000. Another 29 percent of the survey group plan to spend $5 million to $10 million, a nice jump from last year when 23 percent picked that range. About 23 percent plan to spend $1 million to $5 million this year. Approximately 18 percent plan to spend $500,000 to $1 million. And what do they plan to buy? • Equipment upgrades, 58.75 percent. • New equipment, 57.50 percent. • Mine development, 33.75 percent. • Plant additions, 32.50 percent. • Permitting and bonding, 32.50 percent. • Technology upgrades, 32.50 percent. • Exploration, 20.00 percent. • New plant construction, 22.50 percent. • Quality control, 17.50 percent. • New mine start up, 16.25 percent. • Used equipment, 11.25 percent. • Reclaim systems, 10.00 percent. • Other, 5.00 percent. Over and above consumables, such as oil, safety supplies, maintenance equipment, tires and replacement parts, the top equipment areas being considered for 2019 are: • Material handling/conveying equipment, 49.35 percent. • Pick-up/utility vehicles, 45.45 percent. • Excavators/loaders/dredges, 44.16 percent. • Screening and sizing equipment, 44.16 percent. • Motors, 37.66 percent. • Pumps, 37.66 percent. • Drilling and blasting suppliers/services, 32.47 percent. • Washing and classifying equipment, 27.27 percent. • Automation products, 23.38 percent. • Portable crushing/screening plants, 23.38 percent. • Scales, 22.08 percent. • Haul trucks, 22.08 percent. • Crushers, 20.78 percent. • Breakers, 18.18 percent. • Energy management, 16.88 percent. • Drones, 11.69 percent. • Frac Sand equipment, 5.19 percent. • Other, 3.90 percent. Looking Ahead Aggregates producers are pretty confident right now that they are sitting on an acceptable amount of reserves for the foreseeable future. About 82 percent of respondents said they have adequate reserves, up from 66 percent last year. When asked what limits their access to reserves, respondents cited permitting issues, followed by access to materials and NIMBY groups. In addition, about 32 percent of respondents said their plants would operate at 70 to 80 percent capacity in 2019. About 23 percent of respondents said their plants would operate at 90 to 100 percent capacity, and another 23 percent said less than 70 percent capacity. When asked to describe the attitude in the aggregates indus- try in 2019, the prevailing opinion is quite different than last year. Only 34 percent of producers are feeling more optimis- tic about their prospects going forward, versus 65.85 percent Benchmark Survey

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