Monday, March 01, 2010

Crosstie production headed for strong recovery

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Railroad purchases of new wood crossties dropped 5.6% in 2009 to 19.60 million and are expected to decline a further 1.3% this year to 19,37 million, according to the Railway Tie Association's latest forecast.

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Class I purchases will account for a projected 15.234 million wooden ties this year, and "small market" purchases for 4.03 million ties.

"Recent purchases peaked in the period 2006 [20.78 million] to 2008 [20.76 million]," said the RTA. "By 2012, purchases are expected to exceed records of the recent past."

Focusing on "growth path after recovery," RTA said its econometric forecast model predicts a strong market emerging in the next two years, adding: "This may be somewhat surprising, and it must be admitted that timing is far from certain. However, it is also the conclusion reached by the 'Freight-Rail Bottom Line Report' from the American Association of State Highway and Transportation Officials."