Rockin' all over the world

If the market for heavy equipment is strong, that's a pretty good indication that the markets where that equipment is used will be strong. Worldwide demand for heavy construction equipment is projected to rise 5.4 percent annually through 2009 to $106 billion, according to a new study by the Freedonia Group. The study, entitled "World Heavy Construction Equipment Demand," says growth will be supported by the continued expansion of emerging markets, with high points including Eastern Europe, India and China. North America is expected to maintain its lead in terms of both the overall size of demand and growth potential. In the United States, expansion in heavy construction-equipment demand is being driven by the explosive real estate market, according to the study. Your comment?

Housing on the move

New house anyone? July housing starts stayed at about the same level as June, edging down 0.1 percent but exceeding Wall Street forecasts as groundbreaking for single-family homes marched higher, according to a Commerce Department report. July housing starts came in at a 2.042 million unit annual rate, down from June, which saw starts revised up to a 2.045 million unit pace from an originally reported 2.004 million unit rate. Future groundbreaking, an indicator of builder confidence, exceeded economists’ expectations, rising 1.6 percent to a 2.167 million unit pace -- a high not seen in more than 32 years. So, what's the housing market like in your area? Your comment?

Environmental activities

Aggregates producers are often unfairly pegged as anti-environmental. The truth is, operating quarries provide a vital habitat for many types of wildlife. Some of that wildlife has even been driven into quarry areas, or areas of permitted reserves, by home building and commercial construction in growing communities. I have visited many quarry operations where bald eagles, deer, wild turkeys and even endangered lizard species happily co-exist with the production of stone. But, in the interests of becoming even visible with environmental projects, I encourage producers to visit the
Federal Highway Administration web site and check the list of ways you can go the extra mile to support your local wildlife. Many of these projects are more applicable to roadbuilders, but they can be adapted for use in a quarry environment as well. Hint: If you use an idea, publicize it. Your comment?

A change is gonna come

Just when you thought the transportation bill was signed, sealed and delivered, it is being reported that shortly after it returns from recess (just like elementary school kids), Congress will make corrections to the Safe, Accountable, Flexible, and Efficient Transportation Equity Act of 2005: A Legacy for Users (SAFETEA-LU). But don't panic. As with most major pieces of legislation, a technical corrections bill is often needed to clean up some various drafting errors contained in the original version. I wonder if the Don Young Bridge qualifies as a drafting error? Have a good weekend. Your comment?

Man of recycled plastic

The new highway bill is poised to benefit many companies, mostly in the construction and construction-materials industries. But one man that is touting the benefits of the bill for his company deals in recycled plastics. In fact, he calls himself "The Man of Recycled Plastic," (as opposed to the Man of Steel.) This new superman, Jim Turek, heads up a company called Plasticon, and he manufactures products such as recycled plastic rebar supports and transportation signage. He's got unique products and a one-of-a-kind marketing angle. A rising tide lifts all boats. Your comment?

MSHA targets asbestos

Here they go again. MSHA has issued a proposed rule that would reduce by 20 times miners' permissible exposure limit (PEL) to asbestos. The rule would lower the current exposure limit for eight-hour work shifts from two fibers per cubic centimeter to 0.1 fibers per cubic centimeter. The proposed rule would affect miners at all metal and nonmetal mines, surface coal mines, and surface areas of underground coal mines in the United States. No word on whether or not the proposed rule does anything to separate phony asbestos lawsuits from the ones that really deserve to be heard in court. Your comment?

Martin Marietta rolls

In reporting record net sales, net earnings and earnings per share in the second quarter, Martin Marietta Materials predicted good things for the rest of the year as well. The company expects the outlook for the aggregates business in the remainder of 2005 to be positive, with aggregates shipments volume to increase 4% to 6% and aggregates pricing to increase 5.5% to 7%. The price increase is an especially positive development, as for years, producers have been saying the industry needs to get more for its products. Stephen P. Zelnak, Jr., Chairman and CEO of Martin Marietta Materials, noted that shipments and pricing were particularly strong across the Southwest and the Southeast, as demand increased from all end-use construction sectors. Great news, indeed. Your comment?

A silicosis scam

When 20,000 plaintiffs filed silicosis cases in Texas and Mississippi over an 18-month period, it appeared something was "rotten in the state of Denmark," to quote Hamlet (which I sometimes do to give my blog entries that uppity literary feel). Well, something was amiss alright. How about a little collusion between lawyers, doctors and those working in environments known for the presence of particulate matter? Well, a judge brought the hammer down. Read all about it right here. Makes you wonder, doesn't it? Your comment?
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Quarries and cosmetics

Okay, you typically don't think of the rough and tumble quarry environment and the world of cosmetics in the same thought, but sometimes the two collide. Take the case of Basalt Works, a mineral scrub for women. The product gets its main ingredient from a basalt quarry in Oregon. In fact, they sent me sample. (I get stuff like this in the mail every now and again. I am reminded of Gravel: A Cologne for Men, which I received a few years ago. It smells like diesel fuel.) Anyway, quarry operators all over the country take note: your products may be good for more than just concrete, asphalt and road base. Your comment?

A cement record

According to the Portland Cement Association (PCA,) we can expect cement consumption this year to increase five percent over 2004 levels, making this the third straight year of record volume. Additionally, according to PCA's Summer Forecast Report, an increase of 3.3 percent is predicted for 2006. The first rise in nonresidential construction in three years, coupled with little slow down in the residential sector, are seen as the main factors driving up demand. An increase in public works construction is also expected as state finances improve and SAFETEA-LU ramps up. A need for increased cement production is projected through at least 2009. Your comment?

Housing still hot

The housing market is still hot. New-home construction continued at a vigorous pace in July, according to the U.S. Commerce Department. Housing starts dipped 0.1 percent for the month to a seasonally adjusted annual rate of 2.042 million units following upward revisions to the May and June rates. The pace of starts in July was 2.8 percent above a year ago and remained above 2 million units for the fourth month in a row. Single-family home construction edged up 0.5 percent to a pace of 1.711 million units for the month. This was 3.0 percent above the pace of a year ago. A year ago, many economists predicted a downturn for housing in 2005. They were dead wrong. Your comment?

Supreme surprise in California

The California Supreme Court has ruled that there is a minimum standard for reclamation of quarries and mines, and if the local authorities don't hold operations to that minimum standard, the state can step in. The 6-0 ruling reinstated a 7-year-old lawsuit by the state Department of Conservation to shut down two sand and gravel quarries in El Dorado County. The suit was filed after the county government approved reclamation plans that allegedly failed to meet state standards. Of course a postscript here: with the price of land in California, a producer would be missing the boat if it didn't have a money making plan for a worked-out quarry, right? Your comment?

Information please

I am very pleased to have been re-elected to another term on the board of the Mineral Information Institute (MII). MII is a national nonprofit group that provides teachers with educational materials about minerals and the responsible use of natural resources. Last year, the Institute provided educational materials to more than 120,000 teachers. This organization provides a valuable service to our industry. Please support it with a donation today. Contact Nelson Fugate, Mineral Information Institute, 501 Violet Street, Golden, CO 80401, 303/277-9190. Your comment?

Vulcan sets a new record

Lost in the SAFETEA-LU shuffle was the second-quarter report from Vulcan Materials. Vulcan announced record second-quarter net earnings of $122 million, or $1.17 per diluted share, as compared to $88 million, or $0.85 per diluted share in the same period of the prior year. Net sales increased 21 percent from the prior year’s level, while earnings from continuing operations before income taxes increased 32 percent. Commenting on the second quarter results and full-year outlook, Don James, Chairman and Chief Executive Officer said, “Our construction materials operations achieved excellent earnings growth and margin improvement due to strong volumes and pricing. Construction activity remains robust and demand for our products is strong. As a result, we are increasing our outlook for the full year.” More evidence of a vibrant aggregates market indeed. Your comment?

SAFETEA-LU as political football

The passage of SAFETEA-LU brings to the aggregates and construction markets a sense of stability, and a confidence level that during two years of temporary extensions, simply did not exist. That's a positive development. Fortunately, the market did well despite the uncertainties. In retrospect, I have come to believe that the White House used the transportation bill as a political football. By threatening a veto, the administration got a lot of mileage out of its "fiscal responsibility" claim -- which it clearly hasn't exhibited in other spending areas. The media also helped out their case quite a bit, with its overly extravagant reporting on the "pork" in the bill. Also, from the timing-is-everything department, the administration used the bill as capital, making sure there were enough congressional votes for the energy bill and CAFTA before signaling its support for the transportation package. Maybe I'm being a bit too territorial, but I get irritated when i consider that so important a bill was used as a hostage. Alas, such is the nature of the Washington beast. Your comment?

Sign on the line

So, President Bush signed on the dotted line and the highway bill is law. Did you notice that every story about the highway bill on almost every news channel and in every newspaper reports that the bill is loaded with special-interest pork? All of the positive things that this bill will bring to the country is being buried beneath accusations of pork, pork, and more pork. My question is, couldn't our industry have foreseen this and had an appropriate response ready to go? Now we are forced to answer for the Don Young Bridge at every turn. Your comment?

Get those reserves!

The M&A race is on. With the passage of SAFETEA-LU, look for the larger aggregates producers to shore up reserves in growth areas around the country. Vulcan Materials is wasting no time. The company announced today that it has purchased aggregates facilities in Indiana from the Critser Companies Inc., and Northern Indiana Materials Corporation. Members of the Critser family owned both companies. The assets acquired include one stone quarry, three sand and gravel facilities, and related production equipment. The facilities will be integrated into Vulcan's Midwest Division, which has its headquarters in Chicago. Your comment?

The national buzz

The recent passage of SAFTEA-LU has been the catalyst for a lot of news coverage. If you Google transportation bill you will see the length and breadth of the coverage, as many newspapers bring local perspective to the story. While most papers applaud the projects that will be financed by the bill, others have taken a sour approach. For instance, an editorial written in the Monitor, a newspaper from Texas, opines, "The interstate highway system is finished. The federal government need no longer be involved in transportation. Essential infrastructure projects ought to be funded locally. Hmmmmm. Oh really? Your comment?

Bush to sign bill at Cat

Next week, President Bush will reportedly interrupt his month-long vacation to sign SAFETEA-LU -- the bill he once threatened to veto -- at Caterpillar's Aurora, Ill., plant. The plant also happens to be in the district of Speaker of the House Dennis Hastert. Thus will end the long saga of TEA-21 reauthorization. Your comment?

Who voted against?

When it came time to vote on SAFETEA-LU, the House voted 412-8 for the bill (with 14 no shows), and the Senate voted 91-4 for the bill (with 5 no shows). So, who were the legislators who voted against the bill? Glad you asked that question. In the house, they were: John Boehner, R-OH; Jeff Flake, R-AZ; Jeb Hensarling, R-TX; Walter Jones, R-NC; Edward Royce, R-CA;James Sensenbrenner, R-WI; John Shadegg, R-AZ; and Mac Thornberry, R-TX. In the Senate, the 'no' voters were: John Cornyn, R-TX; Judd Gregg, R-NH; Jon Kyl, R-AZ; and John McCain, R-AZ. No democrats voted against the bill. Sen. McCain -- touted as a future presidential candidate -- was an especially harsh critic of the bill. His comments just prior to the vote were particularly vitriolic. Your comment?

Bill takes heat

Not everyone is happy about SAFETEA-LU. Many Republican activists are upset about the six-year $286.5 billion bill approved by Congress on Friday. Bush's aides made clear he would sign the bill even though he previously pledged to veto any measure above $284 billion. "This bill is an egregiously bloated spending bill and this all happens as we move to the final phase of the spending season," said Pat Toomey, head of the Club for Growth, a group that raises money for Republican candidates. Former House of Representatives Republican Leader Dick Armey said a highway-bill veto would be a chance to show Congress "the spending spree is over." William Niskanen, chairman of the Cato Institute think tank, referred to the highway bill as an "abomination" but said Bush likely agreed to it to buy votes for a key priority, the U.S. Central-American Free Trade Agreement. There's something I don't like about the bill myself. The name. It sounds like a square dance. Your comment?

Finally!

Over the weekend, the Senate passed and President Bush agreed to sign the $286.4 billion transportation bill passed last friday by the house. The new bill ends two years of haggling between the White House and the Congress on how best to fund the nation's transportation projects. While we have cause to rejoice, as state DOTs can now confidently plan future highway projects knowing what kind of budget they'll be working with, we must also pause to wonder how it comes to pass that a republican president and a republican congress did not have more to offer the nation's construction industry than $286.4 billion at a time when the nation's infrastructure has deteriorated so bady. I notice that energy interests had no problem getting what they wanted in their recent bill. I will say this. Work on the successor bill to this one must start NOW. Your comment?