Last year at this time, we wrote that many experts in the tire industry were expecting the off-the-road (OTR) tire market to remain flat.
In fact, we said it is "reasonable to believe that tire dealers will find the OTR market as rugged as the terrain the tires tend to navigate."
Flat would have been good. Flat would have been acceptable. But something called the COVID-19 pandemic hit — not to mention a trade war with China. Bridgestone Corp., for one, forecast a 16-20% decline in sales of OTR tires in 2020 vs. 2019.
A year later, the stories we offer today use the word "rebound" about as much as one would find in a basketball publication. With factories shut down earlier last year, and several key industries ground to a halt for much of the last eight months, the OTR tire industry, like many others, is on the rebound.
Ah, but along with the rebound, there's a strong message of hope.
Thing are particularly optimistic for the ag market. As crop prices creep higher, and the sale of farm equipment surges, sales of ag tires, both original equipment and replacement, should increase as well. In fact, Titan International Inc.'s Paul Hawkins said ag equipment makers sold nearly 50,000 more tractors and combines in 2020 than in 2019, and it's looking even better for 2021.
"OE orders are already up quite a bit for Q1 versus the 2020 trend," Mr. Hawkins said. "The fundamentals of the ag business in terms of ag income and commodity prices are in a good place."
Things don't appear to be as optimistic in the mining and construction industries, which suffered mightily as a result of the pandemic.
While the decline in mining wasn't as severe as it might have been, according to Continental's Shawn Rasey, OE demand plummeted as mines cut back on operations. Still, the OE tire market has started to rebound, and replacement tire sales started to climb late last year, with demand growing in 2021.
Barring any major market disruptions or lockdowns, Mr. Rasey told us that "hard rock mining and aggregates could return to pre-pandemic levels."
Record prices for gold and copper, coupled with a boon in underground mining across the western U.S. and in Canada, bodes well for the industry.
The construction market, it seems, was hit hardest last year. But all indicators say a recovery has begun.
Bruce Besancon of Yokohama Tire Corp. said experts predict the GDP will be up in Q1 2021 by about 4%, while Dodge Data & Analytics Inc. predicts U.S. construction starts will increase 4% in 2021, to $771 billion— after the market fell around 14% in 2020.
"The COVID-19 pandemic and recession has had a profound impact on the U.S. economy, leading to a deep drop off in construction starts in the first half of 2020," Richard Branch, chief economist for Dodge Data, said.
"While the recovery is under way, the road to full recovery will be long and fraught with potential potholes. After losing an estimated 14% in 2020 to $738 billion, total construction starts will regain just 4% in 2021."
That jump could result in double-digit growth for OE, according to Mr. Rasey.
One trend, however, seemed to bode best for the OTR industry.
Rob Seibert, president, OTR, U.S. and Canada, Bridgestone Americas, said customers are coming to understand and appreciate the importance of OTR tires and how tire technology plays a key role in productivity.
"Tires are a critical part of every customer's operation, and I think we're seeing more and more attention on that and more desire to understand how we use technology to support that," he said.
Let's hope our focus on OTR tires next year describes both the 2021 market as a schoolchild might describe one of its products: Big.