SUPPLY DYNAMICS WHAT DEALERS ARE WATCHING The good times are still rolling for equipment dealers, who are now conditioned to always be ready for supply chain surprises BY KEVIN YANIK H alf of 2023 is complete, and equipment dealers largely feel good about how the first six months of the year played out. Customers are busy. Healthy backlogs are in place. And the road ahead looks promising overall. Dealers, however, are keeping an eye on a few dynamics that could change their business trajectory. “Right now, everybody is still busy,” says Matt Dibble of Dibble Equipment, which serves New York, Pennsylvania, New Jersey, Maryland and Delaware. “There’s starting to be a little bit more cautiousness in terms of what’s six to 18 months out. Things have been steady and business has been strong, but we’re still dealing with inflation and high interest rates. At some point, that’s going to catch up.” In the West, Mike Murphy of ACS (Aggregate Crusher Spe-cialists) is seeing a little more caution from customers than he has in recent years. The 2024 elections, for one, are already weighing on some minds. “I know a couple of customers have made the comment that they have to do some projects, but they’re probably going to wait a year or two,” says Murphy, president of ACS, which serves California, Nevada, Arizona, New Mexico and Hawaii. “Prices are up significantly. With everything coming up next year, maybe they’ll just wait and see what happens.” Fortunately, the good times are still rolling industrywide. As Dibble describes, opportunities to sell and service equip-ment remain plentiful because producers are running their plants at capacity. That dynamic gives dealers the confidence to proceed into 2024 without making wholesale changes to their businesses. “We’re moving forward as if [the current business envi-ronment] is going to continue,” says Kirk Rainbolt, CEO of Kimball Equipment Co., which serves California, Nevada, Utah, Arizona, Idaho, Oregon and Washington. “We’re mov-ing forward with the same level of equipment purchases and long-term strategic planning as we have in the past. “Think about it this way,” Rainbolt adds. “The inventory we’re seeing delivered today is equipment that we placed pur-chase orders for 12 months ago. That will continue moving forward. We would expect to see inventory placed for today in the second quarter of 2024. Our strategy hasn’t changed.” 20 PIT&QUARRY July 2023 Aggregate producers should be communicating with their equipment dealers now about their 2024 capex spending plans. NEW-WORLD PLANNING One industry change Rainbolt has observed of late is how dealer inventory is managed. In some instances, he says smaller dealers are buying equipment from larger dealers rather than directly from manufacturers. Availability – or a lack thereof – plays a role in this new dynamic. “The smaller dealers who don’t have the capital invested are now relying on the bigger dealers’ inventory because of the risk they have taken,” he says. “Some of the machinery we’re pitandquarry.com P&Q STAFF (TOP); LIANGPV DIGITALVISION VECTORS/GETTY IMAGES (HEADER)
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