Crossties

JAN-FEB 2018

Crossties is published for users and producers of treated wood crossties.

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CONTACT RTA WEBSITE BECOME A MEMBER June 4 Arrive Colorado Springs, Colo., for two-night stay June 5 Lewis Nut and Bolt, La Junta, Colo. Evraz Steel Mill (Rail Rolling Mill) Pueblo, Colo. Holland Weld Plant or Nortrak Pueblo, Colo. June 6 LB Foster IJ Weld Plant Pueblo, Colo. Transportation Technology Center, Pueblo Colo. (Track Walk and Facilities Tour) Pikes Peak Cog Railway, Manitou Springs, Colo. Travel to and stay Denver, Colo. June 7 Koppers Inc., Treating Plant, Denver, Colo. OminTRAX Frack Sand Trans-load Center, Loveland, Colo. BioChar Inc. (Tie/Wood recycling Company), Loveland C, Colo. Stay or depart from Denver (possible bus ride back to Colorado Springs) RTA Summer Field Trip To Be In Colorado Springs BECOME A MEMBER RTA WEBSITE CONTACT Cahaba Pressure Treated Forest Products Eagle Metal Products East Coast Railroad Gross & Janes Co. Hurdle Machine Works Koppers Inc. CROSSTIES • JANUARY/FEBRUARY 2018 12 MARKET OUTLOOK sand, while the rest of the economy will increase demand for transportation of other materials and products. RTA's model predicts the same with revenue ton-miles rising approximately 3.5 percent compared to 2017 (Figure 3), with a positive outlook for tie demand down the road. The RTA team incorporated all the recent impactful numbers into the econometric model and produced the following outlook for tie demand (Table 1). S&P has not updated its upside and downside scenarios, but tests by the RTA economic team of a few tenths of growth, up or down, do not alter the forecast measurably. The March 2018 S&P forecast and a few additional months of data should provide more insight. It should be noted that there are poten- tial drags on the U.S. economy that could weigh in and alter 2018 U.S. and global GDP growth prospects. Analysts and the Association of American Railroads have noted NAFTA negotiations breakdown, or an exit by the United States, would be a major concern for rail interests. The FED's pace in raising interest rates is also some- thing to watch. The 10-year Treasury bond at nearly 3 percent yield, rising labor costs, and increased volatility in the global equities markets bear watching, as should tensions with Asian trading partners and concerns for global conflict. Any of these factors could drag economic growth downward and affect tie demand negatively from the forecast model results presented below. 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Class 1 RRs' Revenue Ton-miles (millions) TABLE 1 New Wood Crossties (in thousands) Year Real GDP Class 1 Purchases Small Market Purchases Total Purchases Pct 2014 2.4% 15,931 7,083 23,014 -5.9% 2015 2.6% 16,566 7,417 23,983 4.2% 2016 1.6% 16,531 8,080 24,611 2.6% 2017 2.3% 15,874 6,634 22,508 -8.5% 2018 2.8% 16,249 6,927 23,176 3.0% FIGURE 3 Source: Surface Transportation Board and RTA forecast. 2017 number is estimated based on three quarters. Save the date for RTA's annual summer field trip. In June, attendees will travel to the Colorado Springs and Denver area for tours of manufacturing operations throughout the area. Along the way, attendees will also enjoy some fun activities, including a trip up to the summit of Pikes Peak, near Colorado Springs. "This event is always an enlightening and fun experience for our attendees. We are excited about the operations we will visit, as we always take away new ideas. Plans for this annual trip are being finalized now, and we look forward to sharing more details in the next issue of Crossties," said RTA Executive Director Jim Gauntt. June 4 Arrive Colorado Springs, Colo., for two-night stay June 5 Lewis Nut and Bolt, La Junta, Colo. Evraz Steel Mill (Rail Rolling Mill) Pueblo, Colo. Holland Weld Plant or Nortrak Pueblo, Colo. June 6 LB Foster IJ Weld Plant Pueblo, Colo. Transportation Technology Center, Pueblo Colo. (Track Walk and Facilities Tour) Pikes Peak Cog Railway, Manitou Springs, Colo. Travel to and stay Denver, Colo. June 7 Koppers Inc., Treating Plant, Denver, Colo. OminTRAX Frack Sand Trans-load Center, Loveland, Colo. BioChar Inc. (Tie/Wood recycling Company), Loveland, Colo. Stay or depart from Denver (possible bus ride back to Colorado Springs). RTA Summer Field Trip To Be In Colorado Springs SAVE THE DATE:

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