Ready-mix demand will increase to 450 million cubic yards by 2018.
AFTER ALMOST two decades as an adviser to the readymixed concrete and related construction materials industries, I can’t think of any annual event that I look forward to more than the TCP Survey which is featured in this issue.
Over the years my editors have asked me to weigh in on some of the assumptions and conclusions they have drawn, and frankly, it is hard to compare the larger multinationals, as some are pureplay cement, aggregates, and ready-mixed concrete producers, and others have substantial assets in building products, the asphalt industry, and related contracting and paving businesses. Nevertheless, if you want to experience an eye-opening comparison, look at the industry from the early 2000s, and then compare it to today. You’ll be surprised how many changes have occurred, especially in the top tier of the largest companies.
It is important to realize that the industry has witnessed major changes since the early 2000s, from the housing boom of mid-decade and the attendant record volumes and profitability, to the whipsawing of a recession unlike anything we ever experienced, and hopefully will not again over the course of our careers. So where is the industry today, and more importantly, what lies ahead over the next few years?
- A Big Recovery in Volumes — From a high of 458 million cubic yards in 2005, the industry sank like a rock, bottoming out at 257 million cubic yards a short five years later, and stayed at these levels for three long years. As 2014 began, I was convinced we would increase from 300 million cubic yards in 2013 to 340
million this year. I was wrong; a cold winter, wet spring, and late season start, coupled with the softness in the housing recovery I wrote about recently, created a perfect storm this year. We’ll be lucky to hit 325 million cubic yards in 2014.This is an improvement but it’s still a long way from the highs. e good news is that demand is expected to increase to 450-plus million yards by 2017-18. Remember, I used the term “demand,” not the ability of the industry to produce at that level of demand.
Pierre Villere is President and Managing Partner of Allen-Villere Partners. Contact Pierre Villere at firstname.lastname@example.org or telephone 985-727-4310.
© 2014 Hanley Wood, LLC. All Rights Reserved. Republication or dissemination of “The State of the Ready-Mixed Industry” (The Concrete Producer, September • October 2014) is expressly prohibited without the written permission of Hanley Wood, LLC. Unauthorized use is prohibited. Allen-Villere is publishing “The State of the Ready-Mixed Industry” under license from Hanley Wood.