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Growth Rates in the Capital Goods Sector Improve: A Wall Street Transcript Interview with Larry De Maria, CFA, Co-Group Head and Research Analyst Covering Global Industrial Infrastructure for William Blair & Company, L.L.C.

67 WALL STREET, New York - April 24, 2014 - The Wall Street Transcript has just published its Building Materials, Residential Construction and Housing Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Construction Equipment Replacement Trends - Growth in Equipment Leasing Adoption Rates - Infrastructure Build in Emerging Markets - Energy Infrastructure Companies - Infrastructure Spending - Production Rates in Capital Goods - Opportunities in Domestic Shale Infrastructure - Increased Rental Demand

Companies include: Caterpillar Inc. (CAT), Cummins Inc. (CMI), Astec Industries Inc. (ASTE), Blount International Inc. (BLT), Manitowoc Co. Inc. (MTW), Terex Corp. (TEX), Titan International Inc. (TWI), Titan Machinery, Inc. (TITN), WABCO Holdings Inc. (WBC), Deere & Co. (DE) and many others.

In the following excerpt from the Building Materials, Residential Construction and Housing Report, an expert analyst discusses the outlook for the sector for investors:

TWST: Remind us of your coverage in the construction space.

Mr. De Maria: We follow the capital goods space, which are industrial companies in agriculture, mining, commercial vehicles and construction. For construction, the specific companies we follow basically make cranes or products such as aerial work platforms, dirt equipment and road building equipment. Those are companies like Caterpillar (CAT); Cummins (CMI), they make components that go into construction; Astec Industries (ASTE); Atlas Copco (ATCO-A.ST); Blount International (BLT), CNH Industrial (CNHI); Manitowoc (MTW); Terex (TEX); Titan International (TWI); Titan Machinery (TITN); and Deere (DE) would be some examples.

TWST: Since we last spoke, we have started to see a bit of an economic turnaround, at least on paper. Are you starting to see anything changing in the companies you cover?

Mr. De Maria: We are starting a bit of a more consistent, steady operating environment, albeit still at relatively low rates of growth, and that has allowed inventory destocking to flip to the other side, and now production rates are becoming more normalized and improving, which is the biggest change versus a year ago. I think what is different today, which clouds the picture a little bit, is that the weather has pushed out some demand for equipment and it has also meant that there have been fewer delivery days, and there have been some production and logistic bottlenecks in the first quarter. That's really a temporary phenomenon, but that does cloud the picture a little bit as to discerning a real trend.

TWST: In late February Caterpillar announced that their retail sales were down just under 10%.

Mr. DeMaria: Yes, 8%. They came out again today with a similar report for total machines.

TWST: Is that due to overall market softness or is there another reason for that lower number?

Mr. De Maria: Caterpillar's retail sales have been basically more of the same, which is to say that anything that is related to mining remains really impaired and that drags down the total number. But construction has flipped to be a positive off of last year's weakness, and we are starting to see slight rates of growth off of easier comparisons in engines. So the numbers are not inconsistent with what we would expect.

We are starting to see an improvement in the business cycle, but again, the mining sector and anything exposed to that sector remains severely challenged. Construction retail sales are now approaching double-digit growth rates.

TWST: Is the situation with the mining sector something you anticipate changing anytime soon?

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.