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OTR tire segment to recover slowly

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"We are predicting very slow recovery" for the OTR tire segment, says Michelin North America Inc. Market Research Manager Debbie Corzine.

Original equipment OTR tire shipments will be down around 24% in 2009, while relacement shipments are expected to be down nearly 9%, according to Michelin data.

The anemic construction market is playing a major role in depressed shipments, says Corzine. "In 2009, residential construction will probably hit bottom during the second or third quarter." Non-residential construction will continue to plummet "and we probably won't see a recovery until 2011.

"If construction is down, it stands to reason that quarry activity also will be down," she continues -- up to 12% this year.

"Tire shipments follow construction spending. We'll be in a trough in spending in 2009."

The federal stimulus package, however, will lead to eventual recovery, with $150 billion having been earmarked for construction projects, she adds.

"But we won't see that (money) in the hands of local and state governments until around the fourth quarter of 2009. That means it's going to be a while before we actually see that affect tire demand."


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