Pit & Quarry, May 2015

Figure 4 CMI Companies Operating Performance Figure 5 Composite Earnings of the CMI Companies Figure 6 CMI Companies Stock Performance sured that a reasonable funding level would be maintained and visible This was highly beneficial for companies in their capital spending strategies The pork attached to the highway bills together with the success of the Tax Protection Pledge movement in the Republican party began to cause increasing political pressure among representatives S P Capital IQ data as of 12 31 2014 all data is TTM S P Capital IQ data as of 3 31 2015 to Congress ECONOMICS PULSE S P Capital IQ as of 12 31 2014 It took two years and 12 short term extensions to authorize SAFETEA LU and then it was for only four years It took three years and nine short term extensions to authorize MAP 21 and then it was only for two years at relatively flat funding As we speak Congress finds itself with another expiring Concrete leading the way 273 percent gain Earnings per share improved for all but three of the companies with Lafarge showing the biggest decrease Construction materials volumes The sector had its largest volume gains in recent years as shown in Figure 7 however the year was relatively uneventful and did not match the optimism demonstrated as the year began Bad weather in the first quarter the inability of Congress to deal with long term transportation funding midterm While the outlook for residential and commercial construction is strong optimism for any significant changes in transportation funding has stalled elections and a higher than expected degree of uncertainty in the overall economy resulted in less than expected results for the year Figures 8 11 present a historic view on volumes of crushed stone sand and gravel cement ready mixed concrete and hot mix asphalt As shown in Figure 3 the CMI has outperformed the market in the first quarter of 2015 and the message from executives and presenters at the annual conventions for NSSGA NAPA NRMCA and PCA was that 2015 should experience stronger gains in volumes and pricing While the outlook for residential and commercial construction is strong optimism for any significant changes in transportation funding has stalled A wildcard is the impact of the low price of oil which could have a dampening effect on certain markets Highway funding Historically the Highway Trust Fund was a significant priority of Congress The bills were long in duration and enwww pitandquarry com May 2015 PIT QUARRY 41