Bulk dump

Bulk aggregates loadings drop 2.6% in June

Bulk Aggregates loadings weakness persisted through June. February, March, and April were revised higher, but June came in well below expectations. Loadings were down 2.6% from May to June and haven’t shown any real growth since a strong surge at the end of 2011. Loadings were at 5.159 million in June, down 4.2% from the prior year. This is the first year-over-year decline since last October. 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 loadings volumes vary from month to month.

Recent history
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 9 quarters. After being flat in Q1, loadings dropped 3.4% in Q2.

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.

Outlook
The weakness that has persisted over the last 2 years is expected to continue in 2012, up just 0.8%, and won’t show a strong rebound in 2013, up just 1.6%. Improvement is not expected to come until 2014 with growth of 3.5%.

Analysis
This market hasn’t grown in 2 years but the level of monthly volatility is extremely puzzling. Within just the last 9 months, monthly volumes have swung from a low of nearly 5 million to just under 6 million in December. Our outlook for 2013 moved modestly lower once more. We expect to see very modest growth in both 2012 and 2013 before improvement takes hold in 2014. It is amazing that on an annual basis, volumes have only improved 2% since the bottom occurred in 2009.

The market will be relatively flat for the next year but year-over-year comparisons will be volatile as 2011 and early 2012 saw large monthly swings and our outlook has been reduced for early 2013. Weak public infrastructure and farm fertilizers are impacting volumes.

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