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12/19/2007



Rail News: Rail Industry Trends

RTA report: Tie production plummets, purchases climb in November



Crosstie production and purchases stayed true to their zig-zag pattern of late. In November, production increased after falling in October and purchases soared after tumbling the previous month, according to the Railway Tie Association's (RTA) monthly tie market report.

Production totaling 1.6 million ties decreased 16 percent while purchases totaling nearly 20 million units jumped 24 percent compared with October's totals. Inventories fell 2 percent to 16.4 million units and the inventory-to-sales ratio dropped from 0.81 to 0.78.

"Purchases are making an unseasonable surge upward," RTA officials said in the report.

During 2007's first 11 months, tie production totaled 19 million units, down 8 percent, and purchases totaled 19.4 million units, down 1.9 percent year over year.

"Purchases have surpassed production in November, maintaining a pattern that characterized most of the year," RTA said.

According to 12-month rolling data, production stood at 20.7 million units compared with 22.5 million units in November 2006, and purchases reached 21 million units compared with 20.8 million units a year earlier.

"Production is gradually slowing ... [while] purchases declined starting in March, but picked up speed," RTA said, adding that purchases are 14 percent higher than the average from the past five years.


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