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Rail News: Mechanical

Rail-car outlook: Rising demand will continue to constrain production capacity, EPA says


A stronger economy and "more vibrant" commodity markets will help spur rail-car demand through year end and into 2004, according to Economic Planning Associates Inc.'s (EPA) quarterly "Outlook for Rail Cars" report released last week.

Second-quarter car and platform orders totaled 16,700 compared with 11,800 in the first quarter.

"Economic activity perked up in the second quarter," EPA said. "Consumer spending strengthened, manufacturing activities showed signs of life and there appeared to be renewed interest in business equipment."

However, the demand uptick constrained quarterly production capacity, leading to a backlog of 33,400 cars at June's end -- the largest since September 1999. Domestic-casting shortages also will hamper production through first-half 2004, EPA said.

Therefore, car deliveries will total 30,000 in 2003 and 39,000 in 2004, EPA believes.

Between 2005 and 2008, demand is expected to increase for steel coal, tank, box and multi-level flat cars; small and mid-size covered, and high-cube covered hoppers; centerbeams; and intermodal equipment. The demand spike will help steadily increase car deliveries from 45,500 in 2005 to 61,000 in 2008, EPA said.

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More News from 9/8/2003