As 2018 comes to an end, there’s a lot to feel good about if you’re a producer or contractor utilizing portable processing equipment.
The aggregate industry had a very good year. Top producers are reporting sales increases and improved pricing that creates a more dynamic selling environment. A look at the latest quarterly production statistics from the United States Geological Survey (USGS) also confirms improved activity, as crushed stone and sand and gravel production was up about 7 percent in the latest USGS report.
Recyclers should largely feel good, as well. At midyear, the National Asphalt Pavement Association (NAPA) released a report detailing the continued use of recycled materials. According to a NAPA survey, nearly 79 million tons of recycled materials were used in new asphalt pavement mixtures during the most recently reported construction season.
Reclaimed asphalt pavement material and recycled asphalt shingles made up most of the recycled materials, keeping the industry on pace with recent years in terms of recycling activity.
A number of portable plant manufacturers and dealers report positive 2018 sales activity, as well, giving the industry yet another reason to reflect fondly on this past year and think optimistically about the year ahead.
“People are more optimistic and more confident in the economy,” says Geoffrey Faber, West territory manager at Rubble Master, which offers mobile crushing and screening plants. “They’re to a point where they feel confident about the economy and optimistic about themselves and their businesses.”
Reasons for optimism
Lee Heffley, vice president and regional sales manager at Brandeis Machinery, agrees 2018 was a fruitful year – specifically for the aggregate and equipment distribution industries.
Both outpaced inventories, Heffley says, putting pressure on production.
“Aggregate production is up once again, and the heavy equipment industry is experiencing significant growth, as well,” says Heffley, whose company is a distributor of Komatsu and Wirtgen equipment in Indiana and Kentucky. “All of this comes largely on the backs of residential and commercial construction, as we are still without passage of a much-needed federal highway and infrastructure-funding plan.”
A federal transportation infrastructure package did not arrive in 2018 to the dismay of those with a stake in the construction materials industry.
Fortunately, many states are picking up the slack of late by passing their own pro-infrastructure measures.
According to the American Road & Transportation Builders Association (ARTBA), voters in 31 states showed their support for transportation infrastructure investments on Election Day 2018, approving 272 of 346 state and local ballot measures (79 percent). Voters have now approved 78 percent of nearly 1,700 transportation investment ballot measures tracked by ARTBA since 2009.
Unfortunately, not every major ballot initiative resulted in an infrastructure victory. A proposed state gas tax increase in Missouri met unexpected resistance at the polls, with voters rejecting the measure 54 percent to 46 percent.
Also, in Colorado, voters rejected two measures to provide new transportation investments: Proposition 109, a measure to provide one-time funding with a $3.5 billion bond, was rejected 39 percent to 61 percent. Proposition 110, which would have increased the state sales tax by 0.62 percent for 20 years and provided an initial jumpstart with a $6 billion bond, also failed, 40 percent to 60 percent.
Statewide measures to protect transportation funds from being diverted to non-transportation purposes fortunately passed in Connecticut and Louisiana. The construction materials industry in California received a major victory, as well, with the defeat of Proposition 6, a state bill that would have repealed a 2017 transportation law’s taxes and fees designated for road repairs and public transportation.
California voters rejected Proposition 6 by about a 10-point margin, signaling the state’s voters see a true need for transportation infrastructure investment.
“By rejecting Proposition 6, California voters delivered a loud and clear message that transportation infrastructure is a priority,” says James Roberts, president and CEO of Granite Construction. “Voters have expressed their will, and SB-1 funding will be used to fund bridge and road safety, transportation and public transit improvement projects across the state.”
The rejection of Proposition 6, along with the hundreds of other state and local ballot pro-transportation infrastructure measures that were approved this November, should fuel portable plant activity in 2019 and in the years that follow.
“By soundly rejecting Proposition 6 and re-electing 95 percent of the state legislators who voted in 2017 to increase the state gas tax to fund needed transportation improvements, California voters showed the public continues to support a user-funded approach to infrastructure investment,” says William Toohey Jr., acting ARTBA president and CEO. “That’s a message the Trump administration and new Congress should heed as they consider a bipartisan infrastructure package and permanent revenue solution for Highway Trust Fund programs next year.”
High demand for equipment
On the portable plant supply side, one 2018 development that emerged was stretched-out lead times. With demand for equipment up, some manufacturers indicated months ago that 2019 might be the soonest they could deliver equipment to customers. That dynamic has forced some customers to shop around for available equipment, but the overall demand manufacturers are experiencing has been welcomed for years.
“We’re still closing out 2018, but overall it’s been a very good year for us,” says Duncan High, division manager of Haver & Boecker’s processing equipment technology. “The opportunities have been quite plentiful and the successes equally as plentiful.
“In most cases, manufacturers are [giving] numerous quotes but you’re only getting a certain percentage back,” High adds. “But I would say in 2018, the ratio of machine quotes we’ve been getting [back] has been quite a bit higher. It hasn’t slowed down too much. We still have a number of machines to come in this year, and we’re already looking at backlogs for 2019.”