Friday, April 28, 2006

10 things to think about

The American Road & Transportation Builders Association (ARTBA) offers 10 reasons why gutting the Highway Trust Fund would be extremely bad public policy:

1. Starving the federal Highway Trust Fund of revenue is not a solution to higher gas prices. Providing and maintaining transportation infrastructure is a core function of government. It is an essential platform for economic activity and facilitates the provision of virtually all essential public services—fire and emergency response, law enforcement, homeland security and national defense.

2. Suspending the whole federal motor fuels tax would reduce revenues to the Highway Trust Fund by $2.5 billion per month. The resulting cut in state and local highway and transit improvement programs would jeopardize 120,000 American jobs.

3. Even if the federal excise were reduced, the federal government could not guarantee that gas prices would drop commensurately at the pump. In fact, research shows that when the states of Illinois and Indiana temporarily suspended their sales tax on motor fuel purchases in 2001 in response to escalating retail prices: the impact on consumer pocketbooks was minimal; and state transportation improvement programs were shortchanged by tens of millions of dollars.

4. Reducing or eliminating the federal motor fuels tax would do nothing to increase the supply of motor fuels—a major reason why motor fuel retail prices are up.

5. Repealing the federal gas tax, even for only a few months, would threaten the solvency of the Highway Trust Fund. The recently-enacted highway and transit bill, SAFETEA-LU, utilizes all available revenues projected to be collected for the Highway Trust Fund through September 2009. Right now, the trust fund balance stands at less than $10 billion. The U.S. Treasury Department predicts the trust fund could run out of money before the end of FY 2009 even with current revenues. Without the collection of highway user fees, spending for highway and transit programs would have to be cut or supported from the general fund, thus increasing the federal deficit.

6. Cutting federal investments in highway and transit improvements would exacerbate traffic congestion across the nation—causing motorists and truckers to spend even more on motor fuel. Research by the Texas Transportation Institute shows traffic congestion is now responsible for 5.7 billion gallons of wasted motor fuel in the U.S. each year.

7. Cutting federal investments in highway and transit improvements would affect traffic safety. Nearly 43,000 Americans died last year in motor vehicle crashes. Poor road conditions and outdated alignments were a factor in an estimated one-third of them. Highway crashes cost American society $230 billion—$820 per person—each year. Traffic accidents are the leading cause of death of Americans 6 to 28 years of age and result in more permanently disabling injuries than any other type of accident.

8. The federal gas and diesel excises have had nothing to do with the recent dramatic increase in gasoline and diesel fuel prices. The federal gas tax rate has not changed since October 1, 1993.

9. What would happen when the federal gas tax suspension is lifted? Would Americans experience—in one day—an 18.4 cent per gallon spike in the retail price of motor fuel?

10. Using the gas tax as a political expediency would be bad public policy and set a dangerous precedent.

Just a little something to think about this weekend. Your comment?

Wednesday, April 26, 2006

Mining equipment demand to soar

There is a lot of activity at the world's metal, coal and aggregates mines. Global demand for specialized mining machinery and equipment (including separately sold parts and attachments) is projected to increase 9.3 percent per year through 2009 to $27.5 billion, according to a new report by the Cleveland-based Freedonia Group. Beginning about 2002-2003, prices for mineable commodities -- especially metals like copper, silver and gold -- began to firm, and then surged in 2004 and continued into 2006. This has led to intensified efforts to mine metal ores, and thus has generated healthy demand for products like mining machinery. Meanwhile, coal, while facing dwindling reserves in numerous countries, remains in demand as an alternative source of energy in an era of high oil and gas prices, while demand for industrial minerals (clays, sand and gravel, stone and a myriad of others) has benefitted from the general upsurge in commodities markets. Your comment?

Monday, April 24, 2006

Carry a big yellow stick

The epicenter of the construction and affiliated industries has spoken -- loudly. Caterpillar Inc. today reported record first quarter 2006 sales and revenues of $9.392 billion and record first-quarter profit of $840 million, or $1.20 per share. Sales and revenues increased 13 percent, and profit per share was up 48 percent compared with the first quarter of 2005. Wow. If that isn't a clear indication of how the industry is cooking right now, I don't know what is. Your comment?

Friday, April 21, 2006

Spiderman

It's been an exciting week here in beautiful downtown Cleveland, as they prepare to film segments for the upcoming movie Spiderman 3. They've turned a portion of Euclid Ave. into a movie set, complete with fake storefronts, faux art galleries and signs for condo complexes under construction. It's the best that portion of Euclid Ave. has looked for a long time. No sightings of Tobey Maguire or more importantly, Kirsten Dunst, as it is doubtful the stars will be on hand for this portion of the shooting. Rumor has it they are looking for a bald-headed quarrry industry editor to play the role of a villain, so i'm headed over to the set right now. have a great weekend. NAME

Wednesday, April 19, 2006

Fatality!

The fatality curse has hit the aggregates industry. On April 4, 2006, a 23-year-old laborer, with one month mining experience, was fatally injured at a sand and gravel operation. The victim had entered the area under the crusher and traveled near the back side of the discharge conveyor tail pulley. His clothing became entangled in the rotating tail pulley. This is the 5th fatality reported in calendar year 2006 in the metal and nonmetal mining industries. As of this date in 2005, there were 9 fatalities reported in these industries. This is the 1st Powered Haulage fatality in 2006. There were two Powered Haulage fatalities in the same period in 2005. The aggregates industry is not the coal industry, but every fatality reminds producers: you have to train, and work safe. Your comment?

Monday, April 17, 2006

Lafarge to sit pretty?

The main man at Lafarge says that the group is stepping back from making any big acquisitions in the near future. In an interview with the UK's Financial Times, Lafont said a large deal is 'not really the order of the day'. There has been frequent market speculation that Lafarge would make an offer for UK building materials group Hanson PLC. 'There will probably be more industrial investment,' Lafont told the FT. 'That doesn't necessarily mean there will [always] be fewer acquisitions than before, but for the next three years that will be the case.' The reason for the lack of another big acquisition before 2009 is not because Lafarge is less aggressive than its peers but because the takeover of the UK's Blue Circle in 2001 has given the company enough size, Lafont said. 'We did the big acquisition before our competitors. We have taken the time to integrate it and it's done... What's left to do is cost cutting,' he said. Sort of puts a damper on the previous rumors reported here, but not necessarily bad news either. Your comment?

Monday, April 10, 2006

Blinded by science

She blinded me . . . with science, as that bad 1980s song goes. I was certainly blinded after learning the basis for California's pioneering role in setting emissions standards for cars, trucks, and off-road equipment is scientifically valid, according to a new congressionally mandated report from the National Academies' National Research Council. California's standards -- which are generally stricter than the federal government's -- are still needed because of persistent pollution in parts of the state, said the committee that wrote the report. California's standards also tend to spur the development of better emission-control technologies that benefit the rest of the nation, the committee noted. It did not comment on the state's recent standards for greenhouse-gas emissions because they were adopted while the report was in progress, and because there are no federal standards to which they can be compared. The committee examined emissions standards governing so-called mobile sources, which include cars and light- and heavy-duty trucks; diesel-powered cranes, bulldozers, and tractors; and equipment such as lawnmowers that run on small gasoline engines. The committee concluded that despite the substantial progress in reducing emissions from mobile sources nationwide, more needs to be done to attain federal air-quality standards in many parts of the country. Very interesting. Your comment?

Friday, April 07, 2006

TXI increases sales

It's looking good for Texas Industries Inc. The company is reporting net income from continuing operations of $11.3 million ($.47 per share) for the quarter ended February 28, 2006. Net income from continuing operations for the same period of a year ago was $1.5 million ($.06 per share). "TXI's margins are regaining their two-year trend of expansion after being compressed by last fall's dramatic spike in energy costs," says Mel Brekhus, Chief Executive Officer. "Cement price increases announced in January have begun to positively impact margins. As lower priced contracts roll off in the coming months, we expect realized prices to continue their climb. Energy costs declined after the first of the year but remain above last year's levels." Net sales for the quarter of $217 million were 20% higher than last year. Compared to last year's quarter, realized cement, aggregate and ready-mix concrete prices increased 20%, 14% and 16%, respectively. Likewise, shipments of cement, aggregate and ready-mix concrete increased 3%, 1% and 8%. "Construction activity in the Texas and California regions remains solid, providing a favorable environment for growth," continued Brekhus. "The expansion and modernization of TXI's California cement plant is well underway. This summer, we also expect to see the initial benefits from projects that will incrementally increase production at our North Texas cement plant." With operations in strategic markets, the nation's 16th largest aggregates producer is sitting pretty. Your comment?

Thursday, April 06, 2006

New report on concrete masonry

A new report indicates that using concrete masonry construction saves lives and protects property from building fires, plus, it is also a wise economic choice. The report has been released by the Fire Safety Construction Advisory Councils representing New England, New York, Pennsylvania, Virginia, and Maryland. Haas Architects and Engineers of State College, Pennsylvania were commissioned by the councils to conduct the study seeking to compare costs between light construction and noncombustible fire containment construction such as concrete masonry. Nothing better than a heavy house, that's what I always say. Your comment?

Tuesday, April 04, 2006

The Senate actually does something!

Here's a little something that moves forward the debate on infrastructure improvements. The National Infrastructure Improvement Act of 2006 (S. 2388) -- introduced by Senators Voinovich (R-OH), Carper (D-DE) and Clinton (D-NY) -- would establish a national commission to conduct a study of “all matters relating to the infrastructure of the United States.” The study would (1) address the aging conditions of public infrastructure and the need for repair before “catastrophic” loss of life or property, (2) focus on improvements that support long-term economic development, and (3) examine innovative financing/investment options. “This study is an important step in focusing attention on the state of our nation’s roads, bridges, dams and other public works, and the need to address adequate funding mechanisms to maintain and rebuild our country’s infrastructure,” says Gerry Shaheen, Group President of Caterpillar Inc., speaking in his capacity as 2006 chairman of the Association of Equipment Manufacturers. “We encourage Congress to pass this legislation to demonstrate the seriousness of the issue and the important role a vital infrastructure plays in our daily lives at work and leisure.” In introducing the legislation, sponsors cited U.S. Department of Transportation figures that poor road conditions cost U.S. motorists $54 billion annually in repairs and operating costs (about $275 per motorist) and that Americans spend 3.5 billion hours a year stuck in traffic, at a cost of $63.2 billion a year to the economy. Your comment?

Monday, April 03, 2006

Record high construction spending

Don't you hate it when the experts are wrong? U.S. construction spending rose 0.8 percent in February, an amount double expectations, as private residential spending surged 1.3 percent to a record high, offsetting a drop in public construction, according to a Commerce Department report. Construction spending climbed to a record seasonally adjusted annual rate of $1.185 trillion in February from an upwardly revised $1.176 trillion in January. The increase was twice what Wall Street forecasted and the amount followed an upwardly revised 0.4 percent increase in January. Private construction spending rose 1.2 percent in February to a record $931 billion, as residential spending surged 1.3 percent to a record $666 billion. Private non-residential spending rose 0.8 percent to $265 billion, the highest level since October 2001. An increase in private construction spending on lodging, office, health care, religious, recreational and power facilities more than offset a decline in spending on construction of commercial, communication and manufacturing facilities, the report showed. Highway and street construction rose 3.8 percent. Your comment?