Bulk dump

Bulk aggregates loadings up 1.1% in July

Weakness has persisted since the start of the year, but June was revised modestly higher. Loadings were up 1.1% from June to July but are still well below the recent high from December. Loadings were at 5.341 million in July, down 3.2% 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 but 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. 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. Despite the volatile monthly data, volumes have essentially trended flat over the last 9 quarters. After being flat in Q1, loadings dropped 2.0% in Q2.

Outlook
The weakness that has persisted over the last 2 years is expected to continue in 2012, up just 1.4%, and won’t show a strong rebound in 2013, up just 2.2%. Improvement is not expected to come until 2014 with growth of 4.0%.

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.

 

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