Have you been putting off key equipment purchases for a few years? Squeezing every ounce of life from existing portable processing machines? Waiting for the right time to buy that new crushing, grinding or screening plant?
Knowing precisely when to purchase capital equipment is a challenging proposition. Market conditions will never be perfect, but some conditions are more ideal than others.
Up until recently, for example, aggregate producers had long been awaiting a multi-year highway bill to emerge. Without a long-term commitment to the federal highway program, some producers were unwilling to tie up capital in portable crushing, screening and washing equipment. Now that the transportation industry has the FAST Act, a five-year, $305-billion highway bill, confidence has been instilled in a number of producers to purchase equipment they’ve eagerly wanted.
“Because we have a highway bill now, [equipment] suppliers say this is good news because people have a vision for five years to make some capex planning,” says George Reddin, managing director of FMI Capital Advisors Inc. “Some producers say capex got pushed off where [they] could only tackle the most important things.”
An SC Market Analytics report commissioned by the National Stone, Sand and Gravel Association (NSSGA) should instill additional confidence in those whose plants are tied to aggregate demand. The FAST Act provides a spending increase of 5.1 percent for fiscal year 2016, and spending will continue slightly upward through fiscal year 2020, according to SC-Market Analytics.
Regionally, some areas will fare better than others over the next few years.
“The Southeast, West, Mountain and some Northeastern regions of the U.S. fare the best under the FAST Act, whereas other states, especially those impacted by the fracking boom, face a pronounced correction,” says David Chereb, executive vice president and chief economist at SC Market Analytics.
Participation at the recent U.S. Composting Council (USCC) Conference and Tradeshow in Jacksonville, Fla., is a positive reflection on the state of another market PP&E covers. Equipment suppliers who exhibited gave the composting show high marks, and more are making the investment to bring equipment to the show’s well-attended demo event.
This year, Edge Innovate (United Kingdom), Revolver Screening Systems (Canada) and Tana North America (U.S.) were among the suppliers demoing for the first time. Pronar, a Polish company with a range of portable trommel screens and a slow-speed shredder, was new to the trade show floor. In addition, the integration of the Ecotec brand within Terex Environmental Equipment was seen at USCC for the first time.
Clearly, interest from portable plant manufacturers is high domestically and abroad to press further into the U.S. wood, biomass and recycling industries.