Evaluating the pandemic’s impact on producers

By |  May 4, 2020
Photo: P&Q Staff

The impact of the pandemic on aggregate producers tends to vary by location. Photo: P&Q Staff

The onslaught of the coronavirus pandemic spurs new questions by the day, and, in some cases, the answers to these questions can change rapidly.

As it became clear the coronavirus was impacting businesses within the aggregate industry, Pit & Quarry sought to find answers to determine how producers were faring. We conducted a survey of producers April 1-8 to gain a collective understanding of the pandemic’s impact on operations. About 100 producers took our survey, providing anonymous feedback through multiple-choice questions and written comments.

The collective picture of the aggregate industry is mixed based on our survey results. The impact on industry businesses in heavily affected places such as California, New Jersey and New York, of course, varies dramatically from states such as Idaho, Montana and North Dakota. But a number of trends emerged as we pored over the survey’s results and the insights producers passed along.

The impact on businesses

In early April, a number of producers were still holding back an opinion on whether or not this economic downturn will be worse than the one tied to the Great Recession. Graph: Pit & Quarry

In early April, a number of producers were still holding back an opinion on whether or not this latest economic downturn will be worse than the one tied to the Great Recession. Click to enlarge | Graph: Pit & Quarry

Not surprisingly, many producers (46 percent) say the impact of the pandemic has been somewhat negative on their businesses. A pair of producers (2 percent) says the pandemic has been extremely positive for business, and a fair amount (21 percent) say they’ve felt no business impact from the coronavirus.

That last stat is a plus, but another 19 percent indicate they’ve felt extremely negative impacts from the coronavirus. Some of the comments supporting “extremely negative” viewpoints are these:

“Closed by governor’s order.”

“Fearful of employees getting sick and depleting our workforce when demand is high.”

“Construction sites shut down [have] lost us the contractor business.”

“In our county, the commissioners have shut down building permits.”

More of the comments P&Q received related to the virus’ direct impact on businesses were at least somewhat positive, though. Here are a few reflecting these kinds of sentiments:

“Little to no changes other than the impact it’s having on miners’ family.”

“We are [a] critical infrastructure supplier. Very little impact if any yet.

“Some furloughs at a few operations, but most aggregate and asphalt plants are producing or heading that way.”

“No impact to production yet.”

“Business volumes have not been affected thus far.”

Canceled and delayed jobs

By April 8, with the world in the midst of the pandemic, most producers had experienced a customer cancel or delay orders because of an impacted construction project. One in five producers (21 percent), in fact, had experienced both cancellations and delays by April 8.

By that same date, 41 percent of producers told P&Q they had only experienced delays. Thirty-eight percent, however, had not experienced a cancellation or a delay by the conclusion of the P&Q survey.

Some of the comments producers shared about canceled and delayed projects are as follows:

“Of the few delayed jobs we have had, none have made mention of virus-related issues.”

“We understand there has been some pullback in residential construction. Some jobs that were planned for the summer have been delayed until the dust settles on this event.”

“Production expectations from clients have become more flexible.”

Getting parts & service

This is another area where most producers have seen a change.

More than half (51 percent) of producers tell P&Q they can still effectively get parts and service from vendors, but these same producers noticed a slowdown in parts and service delivery. A pair (2 percent) of producers says they are significantly challenged to access the parts and service they had prior to the pandemic, but a number
(36 percent) say parts and service are still being provided as they usually are.

Says one producer: “We have just come off winter maintenance, so there is not a big need for a lot of parts and services yet.”

Adds another: “All hotels and restaurants closed down, [meaning] only ‘day trip’ vendors can assist in repairs. Repairs requiring overnight stays are postponed for now.”

The impact on production

Most producers told P&Q in early April that the pandemic had not impacted their ability to produce construction materials. Graph: Pit & Quarry

Most producers told P&Q in early April that the pandemic had not impeded their ability to produce construction materials. Click to enlarge | Graph: Pit & Quarry

While the coronavirus’ impact on industry businesses has been somewhat negative, the majority of producers say the pandemic has not affected their ability to effectively produce materials.

Seventy-two percent of producers have not slowed production, although 20 percent have ramped production down somewhat.

“Rock production in general keeps workers isolated,” one producer respondent writes. “Thus far, Kentucky has had little impact from the virus. Things may change as cases increase in the commonwealth.”

Another producer writes that most employees are situated in machines throughout the day, anyway, so the risk of spreading the virus in the workplace is low.

Responsive actions

With direct coronavirus impacts already being felt and expected impacts to come, many producers were quick to adjust hiring, spending and other areas of their businesses.

Thirty-two percent of producers tell P&Q they put a freeze on hiring, with 19 percent going through with layoffs by the April 8 end date of our survey.

“We have a fleet of 13 of our own dump trucks for delivery,” one producer survey respondent writes April 5. “Those drivers were laid off two weeks ago, as there are no local projects going. We’re hopeful to be able to bring them back to work very soon.”

In terms of spending, a significant chunk of producers reacted to the coronavirus by delaying some spending (47 percent) or delaying all of it (7 percent). Some producers (22 percent) canceled some spending as a result of the pandemic’s economic impact, as well.

To keep their workplaces safe for employees, producers also made a series of adjustments such as limiting or adjusting interactions with customers and vendors (85 percent), doing extra cleaning (81 percent) and allowing employees to work remotely, if possible (51 percent).

One in five producers (21 percent) is staggering work hours as a measure to keep employees healthy and safe, and 16 percent say they temporarily shut down as a precautionary safety and health measure.

“We have instructed our employees to not congregate in break rooms anymore,” one producer survey respondent writes. “Many are eating lunch in their vehicles. Our offices are locked and only allow our employees in.”

Writes another producer: “[We are] no longer using Kronos finger scan for clock-in to reduce risk of direct exposure. [We] spread out morning safety meetings. All personnel received disinfectant for their workplaces and hand sanitizer for their person.”

For additional P&Q coverage related to the coronavirus, visit our dedicated webpage.

Avatar photo

About the Author:

Kevin Yanik is editor-in-chief of Pit & Quarry. He can be reached at 216-706-3724 or kyanik@northcoastmedia.net.

Comments are closed