What 2023 can offer the aggregate industry (Part 2)

The following conversation was edited for brevity and clarity from one of two concurrent Jan. 25 discussions at the 2023 Pit & Quarry Roundtable & Conference. Part 1 of this conversation can be found here.

PIT & QUARRY: For producers, what are your sales expectations for 2023? For equipment suppliers, what are your sales expectations for this year and how are you forecasting equipment sales to the aggregate industry to be?

DAMIAN MURPHY (PECKHAM INDUSTRIES): We’re heavily weighted to government spending in our marketplaces up in New York and New England, so we have a robust outlook for the year. Our challenge is that we have very little visibility, and the government agencies just don’t have the details out there on the projects that put them to work. We’re hopeful for the higher volumes year over year, but we’re not seeing the detail on that just yet.

JAMEN MCDERMOTT (SENSATA TECHNOLOGIES/PREVIEW RADAR): We’re expecting an increase in 2023 – possibly 10, 15 percent in net revenue growth in ‘23. A lot of that is banking on the aggregate industry outside of the U.S.

JOHNNIE GARRISON (SUPERIOR INDUSTRIES): We’ve got a record backlog. We basically sold out for the year. The challenge is going to be getting everything built and to the dealers that need it.

The biggest thing we’re focused on now is expansion and adding labor. It was really hard to add people last year. We’ve had some success. I think other industries are being affected by the recession. People aren’t buying as many boats and new cars and things.

So, we’re going to see more applicants.

We’ve routinely had over 100 open positions in our manufacturing facilities for the last 12 months. When we bring people in, some stay and some leave. We’ve done a much better job in the last few months of getting people, and we have plans to expand. If we can continue to get people and expand our hours of operation, then 2023 will be a record year.

NATE RUSSELL (IROCK CRUSHERS): We had a record year last year. We were up over 50 percent. I’m predicting approximately 20 to 25 percent growth in ‘23. The big thing for us is the ports. The East Coast ports from Newark through Jacksonville are a disaster. The Port of Tacoma is a mess, and Galveston is the same thing.

DAVID JONES (MCDONALD GROUP): We’re going to have a good, strong 2023. Speaking to the ports, we’ve seen a significant hole in the market due to import material from Vulcan [Materials’] issue with Mexico. It’s affecting markets all the way from Jacksonville around to Tampa, all the way to Houston. I think there’s a lot of scurrying around to try to fill that hole.

VINCENT ROCCO (AMCAST): I think 2023 is going to be a great year. We obviously have some concerns. Inflation is slowing down but still there, so we’re going to continue to focus on planning properly.

On the topic of ports and the challenges getting parts here: For us, it takes time to get things from Italy. It used to be three weeks on the water, and now it’s basically six to eight weeks. That adds a little bit more complexity to planning.

RONALDO DOS SANTOS (ANDERSON COLUMBIA CO.): We’re expecting another busy year in 2023. We should have an increase in shipments to supply the dynamic communities where we’re operating. We hope to be able to increase our ability to ship more material by rail. I think this is about the labor shortage. One of the issues in the industry is with the railroad companies, which are dealing with the retirements of employees.

SHAWN BONNINGTON (VIZALOGIX): The challenge we have is if we just grow within our current customer base, we’re going to double revenue. So, we probably have to throttle our growth, in a sense, to say we’re probably only going to take four, maybe five new customers this year because we have to take care of those customers who invested early.

CHRIS WORLEY (ASTEC INDUSTRIES): We fully expect 2023 to be another good year with a lot of increases. We expect to get more equipment out the door this year. With the infrastructure bill hopefully kicking in in full force this year and working with some of the state DOTs, we hope to have a big increase there, as well.

GREG DONECKER (KEMPER EQUIPMENT): We have a strong backlog right now. I’m anticipating a great year.

ALEX KANARIS (VDG): My guess is 2023 is probably going to be a better year than 2022, but I don’t have a very clear indication yet for our industry.

P&Q: We’ve been talking about issues with supply for probably three years, dating back to the start of COVID. Are some of the norms you’re all sharing here ones that will be in play in 2024, 2025 and beyond? What do the next five years look like in terms of supply? Can we get back to pre-COVID norms?

JAMEN MCDERMOTT (SENSATA TECHNOLOGIES/PREVIEW RADAR): If you look back at the last two or three years, I would say no. You just can’t answer that question. There’s no way to know.

ALEX KANARIS (VDG): Also, it depends on what happens with the regulations. That’s the big ‘if.’

DAMIAN MURPHY (PECKHAM INDUSTRIES): I don’t want to go back to pre-COVID. The planning and the execution are much better now than it ever has been. Now, we’ve got to be two, three years ahead – and that’s better for everybody.

P&Q: Any other comments on 2023, whether it’s equipment supply or otherwise?

JAMIE JONES (CAPITAL AGGREGATES): We all know things are pushed out nine months, 12 months. They’re farther out there now. One of the things we heard as we were complaining to manufacturers was kind of what we heard here today: Everybody’s ordering more now, and it’s clogging up the supply chain.

We’re ordering farther ahead and trying to keep more in stock – and so are our vendors. They’re trying to do the same thing. It has changed how we do business. In the past, we looked at price a lot harder. Now, it’s more about trying to keep everything standardized so we can house more parts and not have to have parts for all of these different brands. It has changed how we look at the future.