Strong Economic Momentum Expected to Spill Over to Construction

Following the strongest cement consumption gains in seven years in 2012, cement consumption growth will continue in 2013 with a 6.2 percent increase. According to the latest forecast from the Portland Cement Association (PCA), the majority of market recovery will occur in the second half of 2013.

“Recessions correct imbalances generated during boom periods,” Ed Sullivan, PCA chief economist said. “Few economists doubt the generation of a large pent-up demand during the past several years. The question is, when the economy will unleash its potential for strong growth?”

The accelerated consumption predicted during the second half of 2013 should carry into the following year. PCA projects an increase of 9.2 percent for 2014.

With the expected improvement in the construction market, the need for keeping up with equipment maintenance will increase.  Heavy equipment seats is an important part of equipment maintenance.  A heavy equipment suspension seat that is in good working condition will increase productivity and safety for the operator.  If it is time to replace your construction seat and you need to be up and running quickly; contact IndustrialSeats.com for your best direct replacement option.

Industry News: US New Home Starts Jump to Fastest Pace in 4 Years

With new housing starting to increase the excavating business should see the same results.  Most excavators will be slow in the winter which will allow companies to make improvements to their machines.  Updating your seat is an important aspect in fixing up your excavator, loader, backhoe and skid steer. Feel free to contact an application specialist at Industrial Seats with any questions about replacement seats.  In the meantime, check out article below from Construction Equipment Guide:

US New Home Starts Jump to Fastest Pace in 4 Years
By: CHRISTOPHER S. RUGABER – AP Economics Writer

WASHINGTON (AP) – U.S. builders started construction last month on the most homes and apartments since July 2008, more evidence that the housing recovery is gaining momentum. The Commerce Department said Tuesday that builders broke ground on homes in October at a seasonally adjusted annual rate of 894,000. That’s a 3.6 percent gain from September.

Single-family home construction dipped 0.2 percent to an annual rate of 594,000, after hitting the fastest rate in four years in the previous month. Apartment construction, which is more volatile from month to month, rose 10 percent.

Applications for building permits, a sign of future construction, fell 2.7 percent to 866,000, after jumping 12 percent in September to a four-year high. Still, permit applications to build single-family homes rose to their highest level since July 2008.

Housing starts are 87 percent above the annual rate of 478,000 in April 2009, the recession low. That’s still short of the 1.5 million annual rate considered healthy.

The housing market has been making consistent gains this year, helping prop up an economy that’s being squeezed by a global slowdown and looming spending cuts and tax increases.

Builder confidence rose to its highest level in six and a half years, according to a survey by the National Association of Home Builders/Wells Fargo. Their index of builder sentiment rose to 46 this month, up from 41 in October. It was the highest reading since May 2006, just before the housing bubble burst.

Readings below 50 signal negative sentiment about the housing market. The index has been rising since October 2011, when it was 17. It has surged 27 points in the past 12 months, the sharpest annual increase on record.

Sales of previously occupied homes rose 2.1 percent to 4.79 million in October, the National Association of Realtors said. Sales are near their highest level in five years, excluding temporary spikes in 2009 and 2010 when a homebuyer tax credit boosted purchases.

A key factor fueling the gains is a gradually improving economy, which has increased the number of people looking for homes. At the same time, fewer homes are available for sale. The low supply is helping push up prices.

In addition, mortgage rates have hit all-time lows. And rents are rising, making the purchase of a single-family home or condominium more attractive.

Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the home builders group.

Region: National Edition | Published On: 11/26/2012

Industry News: Bigger Shovels Coming for Mining

From time to time we will be using this space to share interesting industry news we come across. As a follow-up to MINExpo, check out excerpts below from the Wall Street Journal article that ran in the weekend edition (September 29-30, 2012):

Supersizing Mine Shovels
Caterpillar, Joy Global Building Ever-Larger Scoops to Fill Giant Dump Trucks
By: James R. Hagerty & John W. Miller

A Joy Global shovel with a capacity of about 120 tons loads a dump truck with copper ore at a mine in Utah.

LAS VEGAS—Budgets at mining companies may be shrinking as demand for commodities cools, but their suppliers keep touting bigger and pricier equipment.

A Joy Global shovel with a capacity of about 120 tons loads a dump truck with copper ore at a mine in Utah.

At the MINExpo International trade show, Caterpillar Inc. boasted of new mining shovels able to hoist 120 short tons of ore, equivalent of about 50 pickup trucks. Joy Global Inc. one-upped Caterpillar the next day by promising a 135-ton shovel, expected to cost about $40 million.

The idea: let mining companies more quickly fill their biggest trucks—behemoths about the size of two-story houses. Joy’s shovel would do the job with just three scoops of material instead of four needed with today’s largest shovels. As trucks get bigger, shovels need to get bigger too, said Mike Sutherlin, chief executive officer of the Milwaukee-based company.

“Our [new] shovel will be good till they build a bigger truck,” Mr. Sutherlin said. Mining companies need big equipment especially when operating big surface mines. Rio Tinto averages some 700,000 tons of iron ore production a day in the Pilbara region in Western Australia, including over 100,000 tons a day at a single mine, Yandicoogina.

In the short term, miners may prefer to pinch pennies because profits are being squeezed by sluggish demand, weaker prices for some commodities and rising costs. Capital spending by mining companies is likely to fall between 5% and 10% next year if commodity prices stay near current levels, Mr. Sutherlin said. But he and others insist longer-term demand for mining equipment is strong because global population growth implies more need for roads, schools, airports and other infrastructure.

Mining executives say bigger shovels may be more efficient but Joy and Caterpillar must demonstrate that the new tools will work well enough to justify their added cost. One concern: If miners rely on fewer and larger pieces of equipment, the breakdown of one machine will be more disruptive.

Caterpillar and Joy are the biggest makers of the largest types of mining shovels, used in surface mining of coal, copper, gold and other commodities.

Joy’s new 135-ton electric-powered shovel, expected to be available about a year from now, is 22 meters (72 feet) tall. At present, Joy’s biggest shovel can lift 120 tons and costs about $30 million, or $10 million less than the new one. Caterpillar already has an electric shovel that can lift 120 tons and is promising a hydraulic model with that capacity.

Meanwhile, trucks may get bigger, too. The biggest ones in widespread use today can hold 400 tons of material. But BelAZ, a state-owned truck maker based in Belarus, has promised it would have a prototype for the world’s largest mining truck, able to haul nearly 500 tons, by next year.

Credit: Wall Street Journal, B4 Saturday/Sunday, September 29-30, 2012