RANCHO MIRAGE, Calif.—U.S. off-the-road tire demand could set a record this year, according to figures presented at the recent 2012 Tire Industry Association Off-The-Road Tire Conference.
Demand should match or exceed the peak shipment year of 2007, and might grow considerably more if commercial housing recovers, according to Angie Jones, general manager of mining and strategic services for Bridgestone Commercial Solutions, who gave the OTR sector's annual statistics review at the meeting at Rancho Mirage.
The fundamentals of the American economy are strong, but election-year politics will mean many key issues that need attention likely will be on hold, she said.
Jones said the outlook for mining tires is the most optimistic, because of global demand for commodities—particularly for steel, coal, oil, etc.—to support economic growth, especially in the BRIC (Brazil, Russia, India and China) countries.
In the U.S., mining tires account for 10 percent of the shipments but 51 percent of the value of the OTR market, Jones said.
North American customers for mining tires will have to compete with international customers, creating the potential for bidding competition.
Overall, shipments are expected to hit or exceed 300,000 units this year, split relatively equally between original equipment and replacement use, according to Jones.
A high percentage of OE demand will be for vehicles destined for overseas customers.
The outlook for construction tires—accounting for 75 percent of shipments but just 30 percent of the value—is more subdued as demand is tied to the housing industry, which is still struggling to recover, she said.
Recovery in consumption of tires used in the aggregates industry will depend on a rebound in commercial real estate construction, she said, along with revived road building.
The former will require the creation of at least 500,000 office jobs, she said, while the latter depends to a great degree on federal and state funding, and state funding is uncertain at the moment based on reduced tax revenues in many states.