Rock Products

NOV 2014

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

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ROCK products • NOVEMBER 2014 7 ergy projects along the Gulf Coast, includ‐ ing a significant portion in Texas, as well as anticipated infrastructure repairs in South Texas. Proposition 1, a November 2014 consti‐ tutional ballot amendment in Texas, would authorize annual disbursements from the state's existing oil and gas pro‐ duction tax collections to the State High‐ way Fund, with an estimated $1.7 billion transferred in the first year, if approved by voters. The residential end‐use market ac‐ counted for 14 percent of quarterly ship‐ ments, and volumes to this market increased 9 percent. The overall rate of residential growth has slowed, in part due to a reduction in avail‐ able lot inventory. However, the company continues to experience significant growth in certain markets and expects an increase in aggregates‐intensive subdivi‐ sion development. Geographically, heritage aggregates ship‐ ments for the West and Mid‐America Groups increased 5 percent and 2 percent, respectively. As has been the trend in re‐ cent quarters, economic activity in the West Group is stronger than the other groups, with infrastructure, nonresiden‐ tial and residential building each con‐ tributing to growing construction activity. Further, West Group volume variance includes the effect of facilities divested as part of the TXI acquisition; ship‐ ments would have increased over 9 percent excluding this effect. Mid‐ America growth was constrained by unseasonably wet weather in addition to slower economic recovery in certain areas in North Carolina. Volumes in the Southeast Group were relatively flat, with growth in North Georgia being off‐ set by declines in Florida and Alabama. The improvement in north Georgia co‐ incides with Atlanta's metro area job growth ranking eighth in the country. Florida was recently ranked third in total job growth behind only Texas and California and should benefit from an increased emphasis on infrastructure, most visible in the TIFIA‐supported I‐4 Ultimate project in Central Florida, which is expected to begin in 2015. Heritage aggregates product line pric‐ ing remains strong and increased in each reportable group, led by an 8.3 percent improvement in the West Group. The Mid‐America Group and Southeast Group achieved pricing in‐ creases of 3.7 percent and 5.5 percent, respectively. The heritage ready mixed concrete product line reported volume and pricing improvements of 17 percent and 14 percent, respectively, leading to an 840‐basis‐point improvement in

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