{"id":1758,"date":"2020-03-16T14:30:00","date_gmt":"2020-03-16T18:30:00","guid":{"rendered":"https:\/\/www.construction.com\/newsroom_details_pag\/otr-industry-gets-2020-u-s-canada-economic-update\/"},"modified":"2025-08-07T09:47:35","modified_gmt":"2025-08-07T13:47:35","slug":"otr-industry-gets-2020-u-s-canada-economic-update","status":"publish","type":"post","link":"https:\/\/www.construction.com\/reports\/otr-industry-gets-2020-u-s-canada-economic-update\/","title":{"rendered":"OTR INDUSTRY GETS 2020 U.S., CANADA ECONOMIC UPDATE"},"content":{"rendered":"<p><em><strong>OTR Industry Gets 2020 U.S., Canada Economic Update<\/strong><\/em><br \/>\nAttendees were given a look at various economic forecasts affecting OTR sales during this year&#8217;s OTR Conference.<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.construction.com\/wp-content\/uploads\/2023\/01\/US-Forecast-1024x512-1.jpg\" alt=\"\" \/><\/p>\n<p>To help the OTR industry plan for the year, Kevin Rohlwing, TIA senior vice president of training, and Glenn Maidment, president of the Tire &amp; Rubber Association of Canada, presented various industry economic forecasts for the U.S. and Canada, respectively, on what to expect for 2020 and beyond.<\/p>\n<p><strong>U.S. Economic Forecast<\/strong><br \/>\nDuring the <a href=\"https:\/\/www.tirereview.com\/tia-2021-otr-conference\/\">2020 Off-the-Road Conference<\/a> held near Palm Springs, California, Rohlwing said that although he is not an economist, he has gathered data from Dodge Data &amp; Analytics, which provides analytics of the North American construction industry as well as the U.S. Census Bureau, in an attempt to look for patterns and trends that may affect the OTR industry.<\/p>\n<p>Rohlwing said after 10 years of economic expansion, the data analyzed predicts total construction starts might begin to slip into an overall decline. Single-family housing was down 3% in 2019 and is expected to drop another 5% in 2020; multi-family housing was down 11% in 2019 and is expected to drop another 15% in 2020.<\/p>\n<p>Commercial buildings, institutional and manufacturing construction, he said, are also all expected to fall in 2020. Electric power and utility construction is expected to drop by 27% in 2020, however public works starts are forecasted to rise by 4%, he said.<\/p>\n<p>Despite this forecast, Rohlwing said it is important to remember that different areas of the country experience different growth patterns. For example, residential construction starts in the South and West are expected to be very high, but lagging starts in the Midwest and Northeast bring down totals.<\/p>\n<p>\u201cFor those of us in the West and South, there\u2019s some good news on the housing side, particularly in multi-family, and for the Midwest and the Northeast, it\u2019s going to be pretty much business as usual,\u201d he said. \u201cThe move is West. I mean, certainly, the single-family housing is moving that way. Multi-family housing is [also] moving that way.\u201d<\/p>\n<p>Rohlwing said he was concerned to see such a steep drop in utility construction.<\/p>\n<p>\u201cSomething that just blows my mind is the forecast for power utility construction. Just diving in 2020. With everything going on right now and how dependent we are on electricity \u2013 with electric cars and everything else \u2026 that really is kind of troubling, I think, as a country for us that we\u2019re ignoring this,\u201d he said.<\/p>\n<p>Rohlwing said the mining market will basically go slightly up or remain flat in 2020, with the exception of coal, which will continue to decline overall.<\/p>\n<p>\u201cIf we\u2019re looking at aggregates \u2026 the important thing here is that if you look at coming out of 2014, it\u2019s all growth. The numbers are all trending in the right direction,\u201d he said. \u201cThe ag industry is very positive right now; their outlook is very good. It\u2019s all good news for our industry, and it\u2019s good news for the OTR tire business because you can\u2019t move aggregate without tires.<\/p>\n<p>\u201cNow the bad news: Coal. There\u2019s just no convincing me,\u201d he continued.<\/p>\n<p>According to the forecast from the U.S. Energy Information Administration, U.S. coal production will total 595 million short tons (MMst) in 2020, down 95 MMst (14%) from 2019. EIA forecasts also show electric power sector demand for coal will fall by 81 MMst (15%) in 2020.<\/p>\n<p>\u201cCertainly on coal production, just not looking good at all,\u201d Rohlwing said. \u201cThere was a little uptick there out of the last election because \u2018we\u2019re going to get back to coal, we\u2019re going to get back to coal,\u2019 but that\u2019s not what the U.S. Energy Information Administration says. They\u2019re seeing the exact opposite.\u201d<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.construction.com\/wp-content\/uploads\/2023\/01\/Canada-Forecast-1024x512-1.jpg\" alt=\"\" \/><br \/>\n(Glenn Maidment, president of the Tire &amp; Rubber Association of Canada)<\/p>\n<p><strong>Canadian Economic Forecast<\/strong><br \/>\nMaidment presented a macro outlook of the Canadian economy by region with a focus on the impact on the OTR tire sector.<\/p>\n<p>He said the mining sector in Canada, which he used as a proxy for OTR tires, represents 7.5% of the country\u2019s GDP, as opposed to this sector representing only 2.5% of U.S. GDP.<\/p>\n<p>\u201cCanada\u2019s one big mine. We literally have mines in every region and every part of the country. You name the mineral, and we\u2019ve got it somewhere in Canada,\u201d Maidment said.<\/p>\n<p>Maidment continued that 2020 will be the first year in 10 years that every province in Canada will show some GDP growth, anywhere from 0.5% to 3%.<\/p>\n<p>Maidment said Canada\u2019s five-year average growth rate for OTR tires larger than 39 in. is seeing a 9% increase. He explained OTR tire sales are currently doing so well due to a fixation on oil and pipeline production in the provinces, in particular in Saskatchewan and Alberta.<\/p>\n<p>\u201cThe pipelines are what is really driving this discussion,\u201d he said. \u201cThe pipelines must be built.\u201d<\/p>\n<p>As a comparison, Maidment also showed that the five-year average growth rate for ag tire sales in Canada has seen a decline of 15% since 2015.<\/p>\n<p>\u201cIt\u2019s really because of a couple of key factors,\u201d he said. \u201cThe farms \u2026 are getting larger. The tractors themselves are getting much larger and more efficient. And because the tractors are so much larger and more efficient they\u2019re more expensive. And so, what the farms are doing is building these co-ops, so the farm tractors are working 24\/7 but you have fewer tractors doing the work.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>OTR Industry Gets 2020 U.S., Canada Economic Update Attendees were given a look at various economic forecasts affecting OTR sales during this year&#8217;s OTR Conference. To help the OTR industry plan for the year, Kevin Rohlwing, TIA senior vice president of training, and Glenn Maidment, president of the Tire &amp; Rubber Association of Canada, presented&#8230;<\/p>\n","protected":false},"author":41,"featured_media":24835,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_uag_custom_page_level_css":"","footnotes":""},"categories":[75],"tags":[],"class_list":["post-1758","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-reports"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>OTR INDUSTRY GETS 2020 U.S., CANADA ECONOMIC UPDATE | Dodge Construction Network<\/title>\n<meta name=\"description\" content=\"The OTR industry gets a 2020 U.S.\/Canada economic update. 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