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Rail News: Rail Industry Trends

Tie production up, purchases down in March, RTA says


After posting strong month-over-month gains in January and February, crosstie purchases fell 37 percent in March to 1.2 million units — the lowest total since December 2005, according to the Railway Tie Association’s (RTA) monthly market activity report.

However, crosstie production rebounded from a weak February by rising 24 percent to 1.8 million units. The combination of decreasing demand and increasing production “caused inventories to swell by 600,000 ties, or by 3.8 percent,” the report states. The inventory-to-sales ratio rose from 0.72 in February to 0.77 in March.

During the first quarter, tie purchases totaled 4.9 million units and production totaled 4.8 million units.

“Production has settled down to its lowest level in two years, having peaked in the second quarter of 2006, [and] purchases are just where they were during the first quarter of 2006,” RTA officials said in the report.

Meanwhile, 12-month rolling totals through March show purchases totaled 21.4 million ties and production totaled 21.8 million ties.

“After almost four years of growth, purchases finally took a breather and declined 3 percent from February’s level. Still, compared to March 2006, the annual growth rate is 12 percent,” RTA officials said. “Production has been gradually slowing since this past September and is down 4 percent.”

Contact Progressive Railroading editorial staff.

More News from 5/7/2007