Right. So it is by no means time to strike up the band, throw on a party hat and dance in the streets until dawn. But there are some subtle signs that
Right. So it is by no means time to strike up the band, throw on a party hat and dance in the streets until dawn. But there are some subtle signs that our economy ó more specifically, our industry's economy ó is improving.
First, there was The Conference Board's recent leading economic index that shows the economy growing for the remainder of the year, albeit at a slower pace than we've had so far. Closer to home, four companies that supply the aggregates industry reported better-than-expected second-quarter results.
Volvo Construction Equipment said its second-quarter sales jumped 73% compared with that quarter last year. When currency differences are not taken into account, demand was up 67% for the quarter. The company showed improved sales in all of its markets ó even North America, which was up 9%. Rival Caterpillar said its sales were up 31% on the quarter compared with that of last year. The company was confident enough in these results to bump up the bottom end of its sales and revenues expectation for rest of the year by $1 billion. Cat also reported that it has added jobs; two-thirds of those, however, are outside the United States.
Crusher and screen manufacturer, Astec Industries reported a 33.8% increase in net income for the quarter. Domestic sales for the quarter remained flat, while international sales grew. It says a long-term highway bill is needed to spark domestic growth. And MSA, which makes safety gear such as hard hats, reported that its sales grew 4% during the quarter. And like Volvo, it did see domestic sales growth, also of 4%.
This tells me that the urge to hoard cash until the recession breaks is beginning to relax. Although it may not be at the level manufacturers would like, money in the mining and construction sectors is beginning to change hands.
It is anyone's guess what will become of the next highway bill. The housing industry is still on shaky ground (turn to page 40 to see just how shaky). Yet, there are positive signs, and that's Ö well, positive.
Another positive sign, though not related to the economy, is a move in the House of Representatives to pull back funding for transportation projects that have stalled. There are $713 million allocated to these projects, some going back to 1987. In addition to cleaning up the books, it would send a message to those applying for future federal funds: serious inquiries only. Nobody is getting hired and nobody is selling rock if that money is collecting dust. Assign it to a ready-to-go project, or use it to trim the deficit or reduce the national debt.