Annual Report 3 - New Mexico - Energy, Minerals and Natural ...

Aggregates are a high volume/low unit price commodity and track the local economy – they are not tied to the global
markets. Despite the low unit value of its products, the construction sand and gravel industry is a major contributor
to, and an indicator of, economic well-being and growth. New Mexico aggregate production began to decline in 2006.
Aggregate production and consumption for residential and commercial construction decreased in 2008 and 2009 as
the number of building permits decreased and the credit market to fund construction tightened. 2009 is projected
to be the bottom of the aggregate production cycle. With funding shortfalls for highways and road construction, the
infrastructure sector is expected to experience decreased demand for aggregates in the next several years. Aggregate
demand is expected to remain depressed through 2013.
Increased rail traffic and the construction of dual rail lines in southern New Mexico by Union Pacific Railroad has
led to increased demand for railroad ballast and rail bed materials. The start of Spaceport America construction in
2009 has increased aggregate demand in Sierra County. Infrastructure and road projects funded by the American
Recovery and Reinvestment Act of 2009 may bolster aggregate demand.
The aggregate industry continues to move operations and place new operations away from densely populated
centers, where zoning, environmental and land development regulations discourage sand and gravel operations.
Consequently, shortages of construction sand and gravel in urban and industrialized areas are expected to increase,
as are transportation costs associated with sand and gravel commodities. Increasingly, sand and gravel operations are
being included in master zoning and planning documents for regional areas.
ANNUAL REPORT 2010
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