Pit & Quarry, December 2018
FMI expects the market to remain active in 2019 largely due to sustained profitability and the demographic realities at play driver of cost inflation wage inflation is also likely to create cost pressures In September for example U S annual wage growth reached a nine year high of 29 percent Should cost pressures begin to emerge the squeeze in operating margins will place pressure on management teams to both increase prices and cut costs difficult objectives when market growth is slowing and when labor one of the larger expenses on construction materials companies income statement is in increasingly short supply Larger construction materials firms may change their approach to capital investments particularly mergers and acquisitions due to increased costs and other factors WHAT IT ALL MEANS In short the data indicates the beginning of the late cycle for growth in construction materials markets While a recession is possible within the next few years there is equal likelihood that the economy will continue to grow but at a lower rate than was seen coming out of the Great Recession Inflationary cost pressures may also mount weighing on bottom line profits for companies that do not have the ability to push prices higher These late cycle dynamics will undoubtedly change the way larger firms approach capital investments particularly mergers and acquisitions These changes will likely include the following Experience Knowledge Service Rockability Weve got it Rock Solid Solutions Built on Experience Since 1977 INDIANA CONVENTION CENTER Proud Distributor of Aggregate Material Handling Systems 323 Energy Way Bridgeport TX 8003150871 February 12 14 2019 Indianapolis IN Come See Us at Booth 37108 www crispindustries com 34 PIT QUARRY December 2018 pitandquarry com KEVIN YANIK
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