The aggregates industry sits at a crossroads right now. From where we are to where we want to go looks like it is going to be a long, complicated road. So where are we? Let’s take a look at the data.
Aggregates production is treading water. An estimated 687 million metric tons of total construction aggregates was produced and shipped for consumption in the United States in the third quarter of 2016, a slight decrease compared with that of the third quarter of 2015.
Construction spending ticks up and down. Spending during October 2016 was estimated at 0.5 percent above the revised September estimate. The October figure is 3.4 percent above the October 2015 estimate.
Construction starts have been volatile. For the first 11 months of 2016, total construction starts are about even with the same period a year ago. Highway and bridge construction in November fell 16 percent.
Portland cement consumption decreased by 3.9 percent in the third quarter of 2016 compared with that of the third quarter of 2015. Consumption in the first nine months of 2016 increased by 3.1 percent compared with that of the same period of 2015.
U.S. construction starts for 2017 are predicted to advance 5 percent; transportation construction activity is expected to grow slightly, at 1.3 percent.
Now where do we want to go? President-elect Trump campaigned on a “$1 Trillion Promise” to build “a bold, visionary, cost-effective system of roads, bridges, tunnels, airports, railroads, ports and waterways and pipelines.” This is cause for much excitement in the aggregates and construction industries. But I am dismayed by some of the signals now coming out of Washington.
Investment in infrastructure may take a back seat to plans to repeal Obamacare and overhaul the tax code during the first nine months of Trump’s administration, according to transportation watchers. And Senate Majority Leader Mitch McConnell said he wanted to “avoid a trillion-dollar stimulus,” which frankly I find insulting. I hope his wife, incoming Transportation Secretary Elaine Chao will set him straight on that. And Trump himself has backtracked a little, saying that infrastructure wouldn’t be “the core” of his early years in the White House.
The aggregates industry is in an okay place, given the FAST Act and the fact that a number of state infrastructure initiatives passed in November. But to make the quantum leap that we have been promised looks like it is going to take all of the coercion and arm-twisting that we can muster.