Growth spurt

The Freedonia Group recently reported some very good news, forecasting worldwide sales of construction aggregates to increase 5.8 percent per year to 53.2 billion metric tons by 2017. And the news is good for North America, as well, with sales expected to rise over the next five years. The continent saw a decline in aggregate sales of $700 million in 2012 compared to 2007. Our Pit & Quarry Aggregates Industry Index also reflects this fall, showing the industry in North America bottoming out at the end of 2011. However, beginning in the latter half of 2012, the index has risen to its highest levels since the peaks of about seven years ago.

According to the Freedonia Group, aggregates demand is expected to grow in North America over the next few years by about the same amount it fell during the previous time period. Sales are projected to be about $700 million higher in 2017 compared to 2012.

Western Europe is also expected to see a growth in aggregate sales over the next five years. And Asia, says the report, will see the highest gains of any region, though the growth will actually be less than its numbers from the previous five years. As a matter of fact, it was mostly Asia’s growth that kept overall worldwide sales in positive territory during the previous time period.

Global demand for mining machinery is also forecast to expand – 8.6 percent per year through 2017 to $135 billion, according to the Freedonia Group. Large gains are expected to occur in large developing markets such as China, India and Brazil.

The research firm says an expansion in construction spending and agricultural output, as the global population continues to increase, will boost consumption of construction aggregates and fertilizer minerals such as phosphate rock, as well as sales of related equipment.

The greatest sales growth through 2017 will occur in the large Asia/Pacific region and in South America. And while the annual sales growth in North America is anticipated to be only 4.3 percent, the lowest of any region, it is still positive growth.

All of this good news coincides with a general upswing in the North American economy. And while the rise of building construction helps the aggregates industry, an increase in funding for transportation infrastructure would be an even bigger shot in the arm for our recovering market.