Coronavirus survey reveals shift in producers’ outlooks

In early May, nine in 10 aggregate producers indicated to Pit & Quarry that the coronavirus pandemic had not impacted their ability to produce construction materials. Photo: P&Q Staff

A return to the “normal” Americans know and prefer is probably still months away, but some semblance of normalcy has at least returned to our way of life.

Many parts of the country are open for business again, and people are venturing back out to malls, restaurants and salons while taking necessary precautions. In addition, crushed stone, sand and gravel operations across the country implemented coronavirus-related precautions months ago, and business within the aggregate industry goes on at this juncture as spring turns to summer.

To keep tabs on the industry and the impact of the coronavirus pandemic on its businesses, Pit & Quarry surveyed aggregate producers for a second time in May on a number of business topics. The magazine first surveyed producers about the pandemic’s effects in April, so the May survey presented an opportunity to illustrate how the collective mood shifted in the second full month of the pandemic.

39 percent of survey respondents are somewhat pessimistic about the rest of the year, as of early May. Click to enlarge. | Photo: P&Q’s Coronavirus Survey (May 3-11)

Business impacts

Not surprisingly, the majority of producers said in May that the impact of the pandemic was negative on business. In P&Q’s May survey, 48 percent said the impact was somewhat negative while 16 percent felt the effects were extremely negative.

Back in April, 46 percent said the business impact was somewhat negative while 19 percent revealed the impact was extremely negative on their business.

Similarly, 26 percent of producers detailed in May that their business had felt no impact from the pandemic. In April, the percentage of producers feeling no impact from the pandemic was at 21 percent.

In terms of aggregate production, the overwhelming majority (90 percent) of producers said in May that the pandemic had not impeded their ability to produce. While that takeaway is a positive, producers continued to indicate that they had experienced canceled and/or delayed jobs requiring their construction materials.

In May, 71 percent of producers said they had experienced at least one canceled or delayed job requiring their construction materials. That number was up from April, when 62 percent said they had experienced at least one cancellation or a delay.

Also in May, 42 percent of producers told P&Q they had experienced both a canceled and delayed job. That number is up significantly from April, when 21 percent detailed that they had experienced both a canceled and delayed job.

When producers were asked if the coronavirus has impacted their ability to produce, only 13 percent said it had. Click to enlarge. | Photo: P&Q’s Coronavirus Survey (May 3-11)

Producer spending

The magazine also surveyed producers in May about their spending, as reports surfaced early into the pandemic that companies were adjusting their 2020 plans by delaying or canceling capital expenditures.

One in three producers told P&Q in May that they had not canceled any spending for 2020, but a number of producers indicated that they had canceled capital expenditures to one degree or another. One in six canceled at least 75 percent of their 2020 spending, with a handful of those canceling their entire spend for the year.

One in 10 producers canceled between 50 and 75 percent of their 2020 capital spending; one in 10 canceled between 25 and 50 percent of their spend; and one in 10 canceled between 10 and 25 percent of their spend.

A number of producers also indicated in May that they delayed some spending, as well, although 23 percent said they had not delayed any spending at the time of the P&Q survey.

In May, one in four producers said they delayed between 10 and 25 percent of their spend. Another one in four indicated they had delayed at least half of their 2020 spend.

Parts and service

Across P&Q’s surveys in April and May, the magazine also asked producers about their ability to get parts and service from vendors. This aspect of the business improved significantly from one month to the next for producers.

In May, 61 percent said parts and service were still being provided as they were prior to the pandemic. The month prior, 37 percent of producers said they had not seen interruptions in parts and service.

Other producers (39 percent) said in May that they’re seeing a slowdown in parts and service delivery, but that number is fortunately down from April (52 percent).

In May, 27 percent of survey respondents said they expect this downturn to be more severe than that of the Great Recession, compared to 17 percent in April. Click to enlarge. | Photo: P&Q Coronavirus Surveys (April 1-8, May 3-11)

The outlook

Also in P&Q’s two spring surveys, the magazine asked producers to compare the severity of this latest economic downturn to the Great Recession of 2008-09.

When P&Q first asked this question in April, 35 percent of producers weren’t sure how to respond. By May, more producers felt they had a handle on the severity of the downturn, but April’s uncertainty unfortunately shifted to expectations in May for a more severe downturn this time around.

Specifically, 27 percent of producers told P&Q in May that they expect this latest economic downturn to be more severe than the Great Recession. In April, only 17 percent said they expected the events of 2020 to be worse than the events of a decade ago.

Still, four in 10 producers felt in May that this latest downturn will be less severe than the Great Recession. That percentage was up about six points from the month prior.

Also in May, P&Q asked producers to describe their outlook for the rest of the year considering the current state of affairs. The results, as was the case with other questions the magazine asked, were mixed.

Thirty-five percent of producers had some degree of optimism in their May outlook while 48 percent had some degree of pessimism within it. Seventeen percent, however, were not sure what to expect in the months to come.

For additional Pit & Quarry coverage related to the coronavirus, visit our dedicated webpage.