Pit & Quarry, August 2013

BY KEVIN YANIK Charlotte mayor named secretary of transportation A nthony Foxx mayor of Charlotte N C was sworn in as the nations 17th secretary of transportation during a private ceremony at the U S Department of Transportations DOT headquarters Foxx was confirmed for Foxx Bill proposed to eliminate backlog of deficient bridges Rep Nick Rahall D W Va introduced a 55 billion bill June 19 to rehabilitate and reconstruct deficient U S bridges The Strengthen and Fortify Existing Bridges Act SAFE which provides 275 billion in each of the next two years was crafted in response to multiple AGGREGATES FORECAST Markets taking charge What is the Federal Reserve going to do Its unbelievable that an aggregates forecaster should be asking this question but the Federal Reserve matters Our current economic situation is so distorted that Federal Reserve Chairman Ben Bernanke is a better indicator than the federal highway budget for determining demand for the next three years We believe the Fed will not stop quantitative easing this year and most of next year Still markets are beginning to take charge leaving the Fed with less influence over mortgage rates and other longer term interest rates Long term rates will be higher in 2013 than 2012 and rates in 2014 will be higher than 2013 Coupled with this headwind will be continued growth in the economy We seem to have reached a slow growth path that prevents inflation from increasing and keeps labor markets tepid the position in a unanimous U S Senate vote Safety will remain our top priority at DOT Foxx wrote in a message to DOT employees At the same time I will work to improve the efficiency and performance of our current transportation system while building the infrastructure we need for future generations Before taking the position Foxx served Charlotte as mayor for four years According to a press release he made efficient and innovative transportation investments the centerpiece of Charlottes job creation and economic recovery efforts catastrophic failures of highway bridges including the I 35W Bridge over the Mississippi River in Minneapolis and the I 5 Bridge over the Skagit River in Mount Vernon Wash The bill acknowledges that although MAP 21 includes provisions to strengthen the Federal Highway Administrations bridge inspection and inventory standards it represents a flat overall investment in U S highways and highway bridges If passed SAFE would give a 50 percent boost to federal aid highway bridge funding Aggregates United States Level 35 30 25 20 15 10 05 00 Billion Metric Tons 2005 2006 2007 2008 2009 2010 2012 2011 2013 2014 Actual Res NRes NBld Total Residential aggregates demand is increasing and will continue to increase through the rest of this year as higher home prices stimulate homebuilders to supply more homes However as our chart shows demand in 2014 for this component will be flat to down because of much lower housing affordability the first time it is going to go down in five years Nonresidential aggregates demand is flat this year and will increase in 2014 as vacancy rates drop modestly due to higher employment The changes are small due to the slow growth of the economy Nonbuilding aggregates demand is climbing by small amounts as most state and local economies improve and their tax receipts grow There will be no stimulus from the federal government keeping overall gains modest David Chereb David Chereb has many years of forecasting construction materials He received his Ph D in economics from the University of Southern California He can be reached at dc@ davidcherebgroup com 6 PIT QUARRY August 2013 www pitandquarry com