Bulk aggregates volumes unchanged in May
July 16, 2012
Despite reasonable gains in housing and some other construction sectors Bulk Aggregates remains very weak and has barely grown over the last 2 years. Loadings were unchanged from April to May after growing 1.6% from March to April. Loadings were at 5.298 million in May, also unchanged from the prior year. Over the last year loadings in this market have been quite volatile from month to month. 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, but erratic.
This market hasn’t grown in 2 years but the level of monthly volatility is extremely puzzling. Within just the last 8 months, monthly volumes have swung from a low of nearly 5 million to just under 6 million in December, and now stand at just 5.3 million loadings in May. Our outlook for 2012 and 2013 was moved modestly lower. We expect to see very modest growth in 2012 before improvement takes hold in 2013 and freight starts moving again. It is amazing that on an annual basis, volumes have only improved 2% since the bottom occurred in 2009.
As noted above, the monthly variance has been quite high and will probably continue. This will create large swings in the year-over-year comparisons during 2012.
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.
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.
The weakness that has persisted over the last 2 years is expected to continue in 2012, up just 0.6% (previously 1.3%), before finally improving in 2013. The outlook is well below where we were just a few months ago. Growth in 2013 will look better as we get past the volatile 2011/2012 data, accelerating to 3.2%, 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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