Bulk Aggregates down sharply in Q1
May 8, 2012
Unexpectedly, Bulk Aggregates have dropped sharply over the last 2 months, leading to a lack of year-over-year growth in March. Loadings fell 0.7% from February to March, following a downward revision for February (-4.2%). This followed on the heels of December’s 13.1% surge and January’s 8.8% drop. Loadings were at 5.184 million in March, 0.6% below the prior March level. Loadings in this market have been quite volatile over the last year, culminating in the recent swings from October until March. Our forecast doesn’t include that level of volatility so we would expect to see loading volumes vary from month to month, but should see year-over-year gains remain mostly positive.
There were modest revisions to the 2011 data this month, but the main change was in the January through March data. Over the last 6 months, monthly volumes have swung from a low of nearly 5 million to just under 6 million in December. The weakness in the first quarter has lowered our expectations for the market in 2012, but it should still show annual growth. However, as noted above, the monthly variance has been quite high and will probably continue.
Freight levels peaked in the very early portion of 2006. Volumes were essentially cut in half over the next 4 years as the housing and construction industries took a huge hit. Unlike other sectors, this segment didn’t get a late 2009 rebound in volumes, but it did spike up sharply in mid-2010. Despite the volatile monthly data, volumes have essentially trended flat over the last 8 quarters. There is no doubt that weather has been a factor in the very volatile data of recent.
After dropping 7.5% in 2007, 15.0% in 2008, and 17.5% in 2009, loads rose only 1.0% in 2010. Volumes were up a similar amount in 2011, growing just 1.2%, With most of the growth coming from the strong December volumes.
Unfortunately, the weak growth that we are currently seeing has reduced our expectations for 2012, with growth of just 1.8%. This is well below our prior expectations, and has come down considerably over the last few months. Growth in 2013 will look better as we get past the volatile 2011/2012 data, accelerating to 4.4%, and a further gain of 3.9% in 2014.
Bulk Aggregates are movements of mined or quarried stones and minerals (except metals and fuels). This includes such items as asphalt, fertilizers, shale, clay, sand, gravel, and stones. FTR’s data is seasonally adjusted and measures both short and long-haul OTR segments.
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