Ready mixed producer survey reveals pre-tax/yard profits deep in negative territory

Source: National Ready Mixed Concrete Association, Silver Spring, Md.

According to data included in the recently released NRMCA Industry Data Survey of producer members, ready mixed producers have been hit hard by the recession and slow economic recovery.

The average pre-tax profit for ready mixed producers fell to a record -$7.27/cubic yard in 2010. When the recession began in 2008, producers reported an average pre-tax profit of 20 cents; this figure fell to -$3.07 in 2009 as the effects of the recession took hold of the economy.


Ready mixed production in 2010 fell to just 258 million cubic yards, or 0.8 cubic yards per capita from a high of 1.51 in 2006. At the height of the housing boom in 2005, production reached 458 million cubic yards, but has been declining ever since.

“It’s clear from the data that the ready mixed concrete industry is suffering,” said NRMCA President Robert A. Garbini. “Production levels haven’t been this low since 1994. The recession wiped out more than a decade of growth in the industry. The average loss per cubic yard reported shows an industry which cannot sustain itself.”

More than most, the ready mixed industry has been hit hard by the combination of the housing market collapse, tightening credit and resulting constricted commercial construction, and a lack of serious infrastructure investment. In response to the unprecedented drop in demand, Garbini noted that many producers are seeking to “balance their portfolios” by looking at untapped markets–such as parking lots, streets and local roads–to augment production. “There’s great potential growth in these market segments since ready mixed concrete is under-represented in these sectors,” he said.