Pit & Quarry, October 2013

BY KEVIN YANIK Crushed stone production up in second quarter An estimated 321 million metric tons Mt of crushed stone were produced and shipped for consumption in the United States in the second quarter of 2013 according to the U S Geological Survey USGS The 321 Mt represent a slight increase compared with that of the second quarter of 2012 The estimated production for consumption in the first six months of 2013 was 533 Mt a slight decrease compared with that of the same period of 2012 Also USGS estimated U S output of construction sand and gravel produced and shipped for consumption in the second quarter of 2013 was 234 Mt Thats a slight decrease compared with the second quarter of the previous year The estimated production for consumption in the first six months of 2013 was 375 Mt also a slight decrease compared with that of the same period of 2012 An estimated 555 Mt of total construction aggregates were produced and shipped for consumption in the U S in the second quarter according to USGS Thats a slight decrease compared with the second quarter of 2012 The estimated production for consumption in the first six months of 2013 was 908 Mt a slight decrease compared with the same 2012 period One increase was in portland cement consumption which increased slightly in the second quarter compared with the second quarter of 2012 The estimated consumption over the first six months of this year also increased Upcoming Events Safety In Mining A Reliable Operation Is A Safe Operation SME CIM Oct 20 22 Toronto AED Summit Condex Jan 15 17 2014 Houston AGGREGATES FORECAST DCG Inc U S Aggregates Forecast billion metric tons Is a return to peak consumption levels realistic Ive written previously that the United States will not return to its 2006 peak consumption levels anytime over the next 10 years Why have I written this There are two main reasons the 2006 peak was so unusual and future growth is below average Everything was booming for construction from 2005 to 2007 residential nonresidential and nonbuilding The Great Recession knocked the wind out of all three segments The recovery now in its fourth year is slow and uneven Those with stock portfolios and real estate are doing well and driving the economy Most state revenues are increasing at healthy rates and setting the stage for modest increases in infrastructure gains over the next 10 years Because so much public works money comes from Washington D C and with there being a slim chance that the source of funds changes much total infrastructure RESIDENTIAL 031 034 038 044 039 NON RESIDENTIAL 048 054 057 054 055 NON BUILDING 120 110 106 112 116 TOTAL 199 198 201 212 210 Yr Yr Ch 25 05 15 45 00 gains will be modest Residential a category in which aggregates consumption has increased 74 percent since 2008 is at a near term plateau due to rising mortgage rates and stagnant personal incomes Beyond 2015 residential will again be a source of higher aggregates demand Nonresidential up 14 percent between 2010 and 2014 will grow slowly for most of the next decade as slow employment growth and technology changes hinder commercial and retail space requirements Regionally energy states will continue to do well while states with high taxes and high debt loads will not do well States that punish companies will grow slowly as new ones choose other locations and some existing companies 2010 2011 2012 2013est 2014est move As with all trends there are exceptions including Californias Silicon Valley and its attraction to high tech companies and New York which continues to be the financial center of the U S Areas with budget problems that do not reform will go deeper into debt and end up like Detroit Thats how dynamic economics work Its not political its common sense The hope is that Detroits problem will be a warning to other metro areas to find ways to attract good companies and good employees 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 October 2013 www pitandquarry com