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Rail News Home Rail Industry Trends

6/27/2007



Rail News: Rail Industry Trends

Tie production and purchases surpass seasonal averages in May, RTA says


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Crosstie production and purchases exceeded seasonal norms in May, posting higher-than-expected gains, according to the Railway Tie Association’s (RTA) monthly tie market report.

Crosstie production totaling 1.9 million units increased 14 percent and purchases totaling 2.1 million units rose 9.5 percent compared with May 2006. In addition, the inventory-to-sales ratio climbed from 0.76 to 0.78.

However, tie production and purchase totals through May — 8.3 million and 8.9 million units, respectively — lagged behind last year’s year-to-date figures for the same period, RTA said.

Twelve-month rolling totals show production at 21.1 million units and purchases at 20.7 million units, both registering a slower growth pace than the past few months.

“Moderate changes signal the deceleration of an expansion that arguably began six years ago,” RTA officials said in the report. “Production is 4.4 percent below last year’s level [and] purchases had been growing at double-digit rates over the past year, but are now increasing at 2 percent.”

But production still remains 14 percent and purchases, 16 percent, ahead of the industry’s five-year average, RTA said.