Pit & Quarry, July 2017

US MINING QUARRYING TO REACH 6 BILLION METRIC TONS IN 2021 M AGGREGATE FORECAST By David Chereb Aggregate outlook declines beyond 2017 C onstruction markets remain healthy along with a growing economy Near term the prospect of 3 plus percent GDP growth looks good longer term they look worse The enthusiasm for major tax cuts reforms seems to be evaporating in the U S Senate and that will make strong economic growth less likely for 2018 to 2020 But aggregate still has positive upside potential owing to the improvements in housing starts and higher public support for infrastructure spending This is especially true at the state and local level Our outlook beyond 2017 shows a modest decline as housing and nonresidential fall in 2018 and 2019 The small decline is based on higher interest rates higher UPDATE home prices lack of down payment funds the retail freeze and less square feet of commercial required per worker Combined they run counter Copper mining operations continue to outpace aggregate and other mining industry segments in the United States Dr David Chereb has many years of experience forecasting construction materials and his webbased forecasting models have captured every major turning point in materials demand for more than 15 years Chereb received his Ph D in economics from the University of Southern California He can be reached at david chereb@ sc marketanalytics com to the high level of current construction contracts Nonbuilding will continue to improve due to steady support at the federal level and increasing support at the local level The positive impact of a southern border wall is declining as its scope is reduced and the positive impact of a trillion dollar infrastructure program is stretched out and reduced Regionally the South and West are returning as the major drivers of growth The rest of the country is hot or cold on a county by county basis Over the next two years there are no large areas that will do poorly Even the energy areas are recovering and will do somewhat better as long as oil stays above 40 per barrel ining and quarrying activity in the United States as measured in volumes of nonfuel ore aggregate and waste handled is forecast to total 6 billion metric tons in 2021 according to Mining Quarrying United States a report by Freedonia Focus Reports Stone quarries are expected to retain their position as the largest source of materials handled in the U S industry New domestic construction activity will drive volume growth Because stone features a high cost to weight ratio it is uneconomical to ship long distances Exports and imports of stone consequently are negligible The volume of materials handled at U S copper mining operations is expected to continue to outpace all other discrete industry segments remaining the leading source of metal ore and waste materials Expansion in domestic construction activity will stoke gains as growing U S production of copper based building materials will stimulate a rise in ore mining U S Aggregate by Segment billions of metric tons DCG Inc U S Aggregate Forecast billions of metric tons 2013 2014 2015 2016est 2017est 2018est 2019est RESIDENTIAL 039 048 052 058 059 051 054 NONRESIDENTIAL 060 065 069 072 075 073 070 NONBUILDING 106 106 105 104 109 112 118 TOTAL 205 219 226 234 243 236 242 Yr Yr Ch 15 68 32 35 38 29 25 Note There is a small difference between our estimates of consumption and the USGS because of our own estimates in states where USGS does not report values due to competitive concerns 38 PIT QUARRY July 2017 pitandquarry com ISTOCK COM RIVERROCKPHOTOS 2010 Actual 2010 2016 SCMA 2017 2019 2011 2012 2013 2014 2015 2017 2016 2019 2018 140 120 100 80 60 40 20 NBLD NRES RES Note Based on the SCMA County Aggregates Model