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President Trump Is the Wild Card in Predicting the Near Future of the Off-the-Road Tire Industry

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President Trump Is the Wild Card in Predicting the Near Future of the Off-the-Road Tire Industry

For members of the OTR industry who came together last month for the Tire Industry Association’s (TIA) Off-the-Road Tire Conference in Oahu, Hawaii, last year’s pessimism has been replaced by a wait-and-see attitude. It is difficult to predict how the new U.S. president will affect the market.

Roy Littlefield, TIA’s executive vice president, noted President Donald Trump has called for a $1 trillion campaign to rebuild and modernize U.S. infrastructure. Although that certainly would be a big boost for the OTR tire market, how we come up with the necessary funding is still up in the air, he said.

Kevin Rohlwing, senior vice president of training for TIA, took a look at current conditions in his annual state-of-the-industry report. He broke down the OTR tire market into three segments.Construction: small OTR tires with rim diameters of 24-25 inches.

Aggregate: large OTR tires with rim diameters of 29-49 inches.

Mining: giant OTR tires with rim diameters of 51-63 inches.He said the U.S. Census Bureau reported a 4.4% increase in construction spending last year. It forecasts a 6.3% increase in 2017 and a 7.2% increase next year.

Another bright spot is transportation construction. From 2011 to 2021, the total value of private construction will increase from $40.4 billion to $69.7 billion, Rohlwing said. The fastest growing segment of transportation construction includes residential streets, commercial parking lots, private roads and bridges.In his mining overview, Rohlwing said Bloomberg reports mining companies are currently shutting mines in response to weak metal prices. He said Bloomberg noted, “Trump also has talked about tearing up trade agreements, a negative for metals, while investing in massive infrastructure projects, which would boost demand for copper, zinc and steel.”

Rohlwing said to “expect steady demand for construction tires as most sectors are forecasting moderate growth in 2017. Non-residential construction growth will be in the commercial/retail sector, particularly in warehouses as consumer spending patterns shift to online. Strength in health care and civil engineering will offset some of the uncertainty in residential.”Quoting the 2017 Dodge Construction Outlook, Rohlwing said total construction starts are predicted to be up 5% this year, following a meager 1% growth in 2016. The biggest increases are predicted to come from single family housing (up 12%) and institutional buildings (up 10%).Multi-family housing, commercial buildings, manufacturing buildings and public works will either be flat or on the increase. The only negative will be electric utility/gas plants (down 29%), he said.Here are the aggregate and mining tire forecasts, per Rohlwing.

Aggregate tire forecast:

  • “The passage of the new transportation bill is still a good sign, but the lack of highway funding model that meets the true needs will result in minimal growth.”
  • “Private road and bridge construction (which is not dependent on government funding) holds the key to any hope for significant growth.”
  • “2017 won’t be any worse than 2016, but it won’t be much better.”

Mining tire forecast:

  • “Signs are pointing toward a slow recovery in base metals.”
  • “U.S. global policy and the strength of the U.S. dollar will probably have the biggest impacts on mining.”
  • “Signs are there for some recovery in coal, but the damage done by the Obama administration will take years to overcome and any growth will still be determined by the natural gas market.

Next year’s OTR conference is slated for Feb. 21-24 at the Sawgrass Marriott in St. Augustine, Fla.    ■

Selling tires the Hawaiian way

While in Hawaii, MTD stopped by the Lex Brodie’s Tire, Brake & Service Co. outlet in Honolulu. It is managed by Kekoa Nobriga and Assistant Manager Ryan Allexy. The store is open seven days a week, 363 days a year — closing only for Christmas and New Year’s day. The dealership sells passenger, light truck and truck tires and its main brands are Toyo, Michelin, Uniroyal and BFGoodrich.Automotive services offered in the five open-air bays include oil changes, tire rotation and alignment, radiator fluid flushes, brakes, shocks and engine diagnostics.


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