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Rail News: Rail Industry Trends

Tie purchases and production plummet in June after 'hot' May, RTA says


Crosstie purchases and production were scorching in May. So much so, a drop off in June was inevitable, according to the Railway Tie Association’s (RTA) monthly market report.

Tie purchases totaling 2.1 million units and production totaling 2 million units decreased 21 percent and 18 percent, respectively, compared with May’s figures. The inventory-to-sales ratio declined 0.2 points to 0.75.

“May’s hot numbers were probably not sustainable,” RTA said.

However, second-quarter data shows purchases and production are well ahead of last year’s pace. Tie purchases totaled 6.7 million units, up 31 percent, and production totaled 6.1 million units, up 30 percent compared with second-quarter 2005.

“Purchases posted the highest results since RTA started collecting data [in 1987],” the report states.

During 2006’s first half, tie purchases totaled 11.6 million units, up 19 percent, and production totaled 11.7 million units, up 34 percent compared with the same 2005 period.

Twelve-month rolling totals showed purchases surpassed 20.6 million units and production totaled 22.2 million units. The tie inventory rose 12 percent, or 1.6 million units, compared with June 2005.

“Purchases continue to set new records … and are growing at an 11.7 percent pace,” RTA said. “Production is expanding at a rate of 23 percent and is setting its own records.”