Commentary: The Aggregates Industry In 2016

John Vyskocil, vice president of business development at Aligned Equity Partners and Turn-Key Processing Solutions, offers this take on the aggregates industry in 2016:

“As those in the aggregates industry forge their way through the first quarter, it’s worth taking a look at the trends to expect for 2016 as a whole – a successful 2015 should provide plenty to look forward to this year. Forecasting for the aggregates industry means looking at many other industries as well – including construction, transportation, real estate, manufacturing and more. It can be as difficult as forecasting the weather (which is yet another concern). By examining recent industry performance and events and understanding the factors – both internal and external – that affect the industry, however, professionals can feel reasonably confident in gauging the outlook for the remainder of the year. Here are some trends to look for:

A boom in infrastructure needs: Even disregarding the recent passage of the $305 billion FAST Act, it’s likely that infrastructure needs on the national, state and local levels would be a driver for the aggregates industry in 2016. Infrastructure projects including large-scale improvements and renovations to public transit systems, roads and bridges are badly needed, and these projects must be carried out one way or another. The FAST Act will serve to inject funds to begin addressing those needs sooner rather than later, and the industry will see the effects starting this year.

Continued growth in construction: On both the residential and commercial fronts, construction was up last year, and contributed greatly to the quarter-by-quarter increases over 2014 levels for aggregates deliveries. While recent interest rate adjustments may serve to slow new home construction and purchases, the vote of economic confidence that the rate increase suggests should counteract that effect by pushing more prospective buyers to take the plunge. Construction overall may not be the “MVP” that it was in 2015, but it will certainly remain a key component of the health of the industry.

A focus on safety: Several unfortunate and tragic events occurred in 2015 that will place a brighter spotlight than ever on safety in the industry this year. There is no doubt that each and every company in the industry, large and small, is up to the challenge of striving for the absolutely perfect safety record that employees deserve. Expect proactive contributions from leaders in the industry in working with regulators to determine effective standards for lessening, year by year, the need to report on these terrible stories.

A tightening of the “skills gap”: It’s no secret that one of the biggest problems facing the aggregates industry (and industry as a whole) is difficulty finding skilled workers to fill open positions. As workers focus on safety and continuous improvements to processes, opportunities for training and retraining of workers (combined with the ongoing success of the industry) may create more opportunities for new employees to take those needed jobs.

Green considerations: Again, following trends across industry as a whole, green considerations will play a role in the aggregates industry in 2016. A focus on material origins, supply chains and production processes is likely to shift the way that industry suppliers construct and operate their plants, and will add new aspects to the conversations that potential customers have with you. Green considerations are nothing new at this point, but they are not going away any time soon.

Above all, expect the industry to be at its best in expanding and building on positive trends, and learning from and improving on any negatives.”

John Vyskocil is vice president of business development at Aligned Equity Partners and Turn-Key Processing Solutions, a growth segment of the mineral processing and bulk material handling industries. He is responsible for the strategic growth of both companies operating divisions.