Johnson: More of the same a real possibility next year

Editor’s note: As part of our Road to Recovery coverage, P&Q is turning to some of the industry’s leaders for their takes on the road ahead. This month, leaders were posed with the following questions: What does your 2020 crushed stone, sand and gravel production look like to date? Have you seen upward or downward movement on aggregate pricing this year? And do you have an early sense of how production and pricing might fare next year?

Production volumes have been off in the 5 to 10 percent range, and pricing has been impacted very minimally. Our pricing went up in the mid to high single-digits early in the year, and it has held for the most part – although that could change if producers have to start chasing volume instead of margins.

I would anticipate next year to deliver similar volumes, with a mid-single-digit price increase. I think this holds pretty much true across the Southeast.

The election is the wild card, but regardless of who gets elected, interest rates are low and government spending is fixed at the federal level. The questions are about confidence in the new administration – be it President Trump or former Vice President Joe Biden – and whether there is divided government in Congress.

Another question mark is about state matching funds, as motor fuel tax revenues have to be off considerably with no real outlook for some relief – be it from business and vacation normalization, or from some kind of fix from the federal government. If states are spending faster than they’re replenishing, then they will have to hit a wall sometime – and it won’t be pretty.

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Dan Johnson is a veteran aggregate producer with more than 30 years working in the industry.

Featured image: PamElla Lee Photography