Wednesday, January 31, 2007

SAFETEA-LU to get funded


It looks like Congress will fully fund the federal highway program, putting to rest speculation that funding levels would be frozen at last year's dollar figure. "The announcement by the House and Senate Appropriations Committees to fully fund SAFETEA-LU is a significant victory for our nation," said Stephen E. Sandherr, chief executive officer of The Associated General Contractors of America. The agreement will fully fund SAFETEA-LU at authorized levels of $39.1 billion for the highway program, a $3.5 billion increase over the FY 2006 level. Transit is also fully funded at $8.97 billion, an increase of $470 million over the FY 2006 level. "Highway and transit funding is important to every segment of the economy," said Sandherr. "The overwhelming support from members of the House and Senate shows the importance of the federal transportation funding to improving safety and reducing congestion in every state and every congressional district." The House is expected to vote on and approve the measure today while the Senate will take up the measure next week. Your comment?

Tuesday, January 30, 2007

Rinker fights back


Rinker Group Ltd., the parent company of Rinker Materials, the fifth largest producer in the U.S., is fending off a takeover bid from Cemex. The Mexican company has offered $11.7 billion for Rinker. If Cemex is successful, it would become the largest cement-maker in the world. Shares of both companies have been rising as the battle heats up. Cemex just posted a 55 percent increase in fourth-quarter net income. Rinker is looking at options including mergers, acquisitions, asset sales or changing its business structure, to keep Cemex at bay. Keep an eye on this one. Your comment?

Monday, January 29, 2007

Hanson, Cemex, Rinker, what?


Overseas financial sources are talking about a possible Hanson sale. Rumors about a bid for Hanson have been overheard for the better part of the past year, but the idea is again picking up steam. According to sources, Hanson is in a particularly strong position in comparison with many of its rivals on both sides of the Atlantic, because it has "enough aggregate reserves to maintain its position in the market for many years to come." Until recently, Mexican rival Cemex was rumored to be interested in Hanson. Cemex is currently embroiled in a takeover bid for Australia-based Rinker. Your comment?

Friday, January 26, 2007

Vulcan goes buy buy


Vulcan Materials is digging into Martin Marietta's turf. The company announced that it has purchased the Burke County Stone Quarry in North Carolina as well as the Avery Gravel Co. Quarry in Illinois. The Burke County Quarry is near the town of Morganton in western North Carolina. The Avery facility is in Kendall County, Illinois, approximately 50 miles west of downtown Chicago. The quarries will become part of Vulcan's Mideast and Midwest Divisions, respectively. Vulcan's Chairman and CEO, Don James said, “These two new quarries add approximately 140 million tons of zoned and permitted reserves. The Burke County Quarry will allow us to serve our customers in western North Carolina more efficiently. The Avery Quarry expands our Midwest Division's geographic presence in the very attractive suburban market of western Chicago.” Indeed. Your comment?

Thursday, January 25, 2007

Construction starts


Reed Construction Data announced that the year-to-date value of construction starts through December 2006, excluding residential contracts, totaled $281.1 billion, 9.2 percent higher than in 2005. Allowing for construction cost inflation, the real volume of new starts increased about 3 percent in 2006 compared to 2005, approximately matching overall growth in the economy. December starts increased 21 percent from the weak November total and were 26 percent above last December. They were among the highest monthly totals ever. The growth in new project activity is in the neighborhood of the peak for this building cycle. Ahead, the increase in monthly project totals will be largely due to project cost inflation. The rapid decline in the value of construction starts that occurred after previous periods of rapid growth is not expected in 2007-2008. Last year’s fastest growing markets were hotels, amusement and recreation facilities, nursing and assisted living homes, government buildings (other than public safety), parking garages and hospitals. Roads and highways weere up 12.9 percent for the year. Your comment?

Wednesday, January 24, 2007

Production predictions


Buried in the latest mineral commodity reports from USGS are predictions on production for 2007. It is estimated that in 2007, domestic production and apparent consumption of crushed stone will be about 1.73 billion tons, a 2 percent increase. It is also estimated that 2007 domestic production of sand and gravel will increase to 1.29 billion tons and U.S. apparent consumption will increase to about 1.3 billion tons. So, do the math. If USGS's predictions pan out, 2007 will finally be the year that we reach the mythical 3 billion ton-per-year mark. Your comment?

Tuesday, January 23, 2007

Condolences


I just learned of the death of Dr. Richard Barksdale on Jan. 14 in Atlanta. Dr. Barksdale was a retired professor from the Georgia Institute of Technology whose research interests included aggregates, ground improvement techniques, settlement of buildings on residual soil, geosynthetic applications, pavement design and asphalt concrete. He was the editor of the first edition of NSSGA’s Aggregate Handbook, one of the industry's best reference sources. Condolences to the family of Dr. Barksdale. Your comment?

Monday, January 22, 2007

Eighteen lanes of controversy

There's some hootin' and hollerin' going on in Texas. Between 2003 and 2009, $2.7 billion of state and federal money will have been plowed into expanding 23 miles of Interstate-10 in west Houston to as wide as 18 lanes in some stretches of the city's main east-west road. The project is filled with controversy. Read about it here. Your comment?

Thursday, January 18, 2007

2007-2008 construction to rise

According to Reed Construction Data's latest construction report, total construction spending declined in November 2006 for the seventh consecutive month, with several more months of small declines or little change expected. This is a weaker trend than expected early in 2006, so job-site construction spending will increase only 4.8% in 2006 on a full-year over full-year basis, even though the December to December change will be about 0.0%. As a result of the weak spending late in 2006, 2007 will see only a 2.6% annual average rise, while the December 2006 to December 2007 change will be about +5%. The expected turnabout to monthly gains in construction spending will be late winter or early spring. From that point, total spending will be rising at about a 6% to 7% annual pace through 2008. The turnabout will occur soon after the stabilization in housing starts, which will result in an upturn in new homes under construction. Your comment?

Wednesday, January 17, 2007

Honoring Joe

Here's a well-deserved one. The National Stone, Sand & Gravel Association (NSSGA) today named Joseph "Joe" Andrews, Jr., vice president, Real Estate, for Luck Stone Corp., Richmond, Va., recipient of the tenth annual Barry K. Wendt Memorial Commitment Award for his dedication to the construction aggregates industry, his family and his community. The award will be presented in ceremonies during the NSSGA Annual Convention in San Francisco, Feb 27-March 2. "Joe Andrews personifies all that's excellent about the aggregates industry," said NSSGA President and CEO Joy Wilson in making the announcement. "His decades of service to Luck Stone and to our national association have been exemplary, and we have all benefited richly from Joe's wise counsel and good judgment. He very clearly merits this high honor." I couldn't agree more. Your comment?

Wednesday, January 10, 2007

Rising materials prices

According to Reed Construction Data's latest Construction Related Price Indices Report, current to November 2006, construction aggregates prices were up 0.1% month over month; 1% over three months ago; 9.9% over a year ago, and a whopping 23.1% over three years ago. Still not as high as diesel fuel, which is up 105.6% over three years ago. Your comment?

Friday, January 05, 2007

AEM encourages new congress

More advice for the 110th Congress is rolling in, this time from the Association of Equipment Manufacturers. AEM says it looks forward to advancing the legislative goals of its members. “Continued strengthening of the economy should be a major emphasis of the new Congress,” stated AEM President Dennis Slater. Among the major issues the new Congress will face, according to AEM, is how to fund the mounting infrastructure needs of our nation. “A reliable and dependable transportation network is vital to the growth and strength of our nation’s economy in an ever increasing global marketplace,” said Slater. “Increased funding for water infrastructure improvements is also critical to ensure quality of life.” Your comment?

Thursday, January 04, 2007

New congress convenes

The 110th Congress, now under Democratic control, is expected to deal with leftover FY '07 spending bills very quickly, according to NSSGA. At the end of last month, the House Democrats announced that when Congress convenes they would enact a long-term "joint resolution" that will fund the government -- without earmarks. Under the joint resolution, the highway program would be funded at the FY '06 level, $3 billion less than the authorized amount. New House Transportation and Infrastructure Committee Chairman Jim Oberstar (D-Minn.), a friend of the industry, is pressing House Appropriations Committee Chairman David Obey (D-Wis.) for an exception for highway funding that would allow the increases called for in SAFETEA-LU to take affect. Oberstar contends that if the increases are delayed, many states' construction projects will be 'knocked off the schedule.'The aggregates industry is in full agreement. Your comment?

Tuesday, January 02, 2007

New year, new homes, same old story

If one thing is certain in the new year, it's uncertainty in the housing market. Take new homes for instance. Lennar, one of the nation's largest home builders, warned that it has "not yet seen tangible evidence of a market recovery." While we are hopeful that low interest rates, strong employment and a healthy economy will help stimulate a recovery in 2007, we have continued to focus on strengthening our balance sheet by delivering our backlog, selling inventory aggressively and renegotiating our land positions," said CEO Stuart Miller. Lennar is not the only home builder hit by the slump in housing. In the last few months, Pulte, Centex and Toll Brothers have all given earnings guidance below forecasts, and analysts are forecasting continued earnings declines at other home-building companies as well. But a government report last week on new-home sales offered a bit of good news: stronger than expected sales pace and a gain in median prices in November. Your comment?