Pit & Quarry, January 2010

An Inside Look P Q Index 20 or Smoothing out the bumps T he P Q Index you see in our monthly Snapshot section is designed to indicate the health of the aggregates industry While the figure fluctuates each month the idea is that a glimpse of the numbers over a oneor two year period will show trends Weve re examined the formula one that hasnt changed since we first developed it about four years ago and determined it was time for an adjustment Monthly fluctuations are sometimes sharp making it more difficult to see the long term trending of the numbers The adjustments serve to smooth out the bumps and increase the accuracy The P Q Index you see on page 6 shows revised numbers for the past two years Weve received a lot of interest recently regarding how we developed the formula Ive explained it in this space in the past but perhaps a more clear explanation is in order The stock prices of publicly traded aggregate producers like Vulcan Materials and Martin Marietta give some indication as to the health of the industry but they dont tell the whole story Examining only the stock prices can even be misleading We set out to find data that mirror the rise and fall of industry stocks We looked at construction starts producer price indexes employment figures production totals etc We examined three years worth of data To our amazement we found that certain numbers closely correlate to the rise and fall of industry stock prices and a formula was developed using the data and stock valuations carefully weighted Most of the time the data supports the stock prices When industry stocks rise or fall owing to factors unrelated to the industry the data portion of the formula keeps the index number in line The same holds true if the data f luctuates owing to seasonal or other causes In that case the stock prices keep the index number stable The result is what we believe to be an accurate index number And our recent adjustments make it even better Darren Constantino EDITOR IN CHIEF dconstantino@ questex com WE SET OUT TO FIND DATA THAT MIRROR THE RISE AND FALL OF INDUSTRY STOCKS www pitandquarry com 600 Superior Ave East Suite 1100 Cleveland OH 44114 216 706 3700 Fax 216 706 3710 E Mail info@ pitandquarry com EDITOR IN CHIEF Darren Constantino 216 706 3747 dconstantino@ questex com SENIOR EDITOR Brian Richesson 216 706 3748 brichesson@ questex com CONTRIBUTING EDITOR Mark S Kuhar mkuhar@ questex com SAFETY EDITOR Carl R Metzgar cmetz46840@ aol com LAW EDITOR Michael T Heenan michael heenan@ odnss com WESTERN U S CORRESPONDENT Bill Elverman elvermanwrites@ yahoo com PRINT ELECTRONIC ADVERTISING PUBLISHER Rob Fulop 216 706 3741 rfulop@ questex com SALES MANAGER Dino Vitanza 216 706 3744 dvitanza@ questex com CLASSIFIED ADVERTISING REGIONAL SALES MANAGER Dino Vitanza 216 706 3744 dvitanza@ questex com ART DIRECTOR Kim Traum PRODUCTION MANAGER Krystal Lund 218 279 8841 klund@ questex com DIRECTORY PRODUCTION MANAGER Angela Dumonson 218 279 8845 adumonson@ questex com PRODUCTION DIRECTOR Rhonda Sande MANAGER AUDIENCE DEVELOPMENT Debbie Gullian LISTS Ilene Schwartz Kroll Direct 216 371 1667 Fax 216 371 1669 ilene@ krolldirect com REPRINTS 800 290 5460 ext 100 pitandquarry@ theygsgroup com SUBSCRIPTIONS BACK ISSUES CUSTOMER SERVICE Phone 866 344 1315 or 847 763 9594 if outside the U S Fax 847 763 9694 Web www pitandquarry com subscriptions President Chief Executive Officer Kerry C Gumas Executive Vice President Chief Financial Officer Tom Caridi Executive Vice President Tony DAvino Executive Vice President Jon Leibowitz Executive Vice President Gideon Dean For Technology Research Aggregates Foundation SAND STONE GRAVEL And Education FOUNDER 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 2 PIT QUARRY January 2010 www pitandquarry com