Why 2023 can be another good year for the industry

The industry is alive and well.

2022 proved to be one for the record book despite the obstacles thrown its way. The post-COVID hangover, inflation, labor shortages and supply chain disruptions were no match for the vibrancy of equipment manufacturers, dealers and aggregate producers.

The sheer determination of the folks we interact with every day – those who refuse to be deterred by a minefield of issues – is amazing. The success of 2022 speaks to the grittiness of all those who wake up every morning believing there is a solution to every problem, and their grit strengthens the industry’s resolve moving forward.

Setting expectations

2023 will continue to bring many of the same issues we all face today. The decisions made six months ago will have a large impact on businesses in the next 12 months.

Have you prepared and planned for 2023? Does your business have a plan to recruit new employees and retain existing ones? A review of competitive compensation, improved employee benefits, training and employee development will be necessary to maintain the growth we all experienced this year.

Will producers continue to shift toward automation as a means to reduce labor requirements? The cost can be a huge capital investment up front, but the investment presents a larger reward on the back end if executed properly.

Supply chain disruption will continue in 2023, as well. So many of the products we rely on are sourced offshore – an unfortunate reality of the world we live in.

Strategic planning for 2023 was required in early 2022 to overcome any shortfalls. The manufacturers that survive and grow moved away from single sourcing for components and castings. Those who continue to put all of their “eggs in one basket,” meanwhile, will struggle.

Diversification of the supply chain is key for aggregate production growth. From a dealer perspective, a deep inventory of equipment and parts is required to alleviate long lead times and fuel growth.

Other projections

Will talk of a looming recession and rising inflation deter some from taking additional risks? And will there be a pullback to reduce exposure?

Personally, I think admitting defeat before a battle is fought is a mistake. Based on the entrepreneurial nature of so many in the industry, it is unlikely folks will go down easy. Any downturn due to housing starts, for example, should easily be overcome by infrastructure projects. And, ultimately, those who take risks will be rewarded.

For 2023 to be a success, the aggregate producers who resisted increasing prices will likely need to increase pricing on their products. These producers can no longer be the “shock absorber” between suppliers and end users. Our industry is capital intensive – and at every level. Margins must keep pace with inflation or reverberations will be felt all the way back through the supply chain.

In our region west of the Rockies, business continues to be strong with little indication of a downturn. No one can predict with certainty the future of the economy – especially with inflation, rising interest rates and a midterm election.

Still, I am optimistic that 2023 will shape into another good year because of proper long-term planning, a strong U.S. dollar and an influx of infrastructure money that’s on its way.

Kirk Rainbolt is CEO of Kimball Equipment Co., an equipment dealer with 12 locations across seven Western states.