Our second fiscal quarter has historically been slower as a result of a seasonal downturn in construction activity due to the holidays and the onset of winter weather. Consistent with prior years, we have planned outages for routine maintenance and equipment enhancements during the slower business activity over the winter months. These activities allow us to prepare for stronger anticipated demand in our fiscal second half.
That completes our commentary on the first quarter results. Thank you for your attention. We will now open the call to questions.
Question and Answer Session:
Operator
(Operator Instructions)Our first question comes from Luke Folta at Jefferies.
Luke Folta, Jefferies Group LLC
Good morning, Joe, Barbara.
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Good morning, Luke.
Barbara Smith, SVP and Chief Financial Officer, Commercial Metals Company
Luke.
Luke Folta, Jefferies Group LLC
I guess the first question I had was on the fabrication business. This is another quarter of very solid volume growth, but with the business still generating losses, and clearly there are margin issues there. You have talked about improving mix towards more private work as of late as the backlog has grown. Can you just maybe give us some more detail on what is going on with the margins on that business? You touched on imports being a factor in the remarks, but I would think that with this sort of volume increase that we should start to see some positive pricing momentum at some point here. Just any thoughts on that would be very helpful.
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Well, Luke, it is not just a factor. It is the most significant factor that we face on the fab side of the business with imported product being brought in at significantly below market prices causes us to have to be competitive and quoting on our fab business. So we have seen an overall strength in metal margins in the steel mill side of the business and the deterioration on the fab side mostly owing to the imported product, so it is not a small factor. It is the most significant factor that we are seeing really across the board.
Luke Folta, Jefferies Group LLC
I am surprised you see that more so on the fabrication side of the business than the mill side of the business. Is that because you have got competing fabricators who are buying imported products at a much lower price so they can charge a lot less? Why is not that showing up on that rebar price from the mill segment?
Joseph Alvarado, Chairman of the Board, President, and CEO, Commercial Metals Company
Our fab businesses are dependent on sourcing material competitively and we compete against independents who also have access to imported product. With the significant pricing differential that we are seeing in rebar pricing and anticipated pricing of those products causes the independents to be more aggressive in their pricing to secure business at less than attractive margins or the kinds of margins that we would like to look at, so the battle there is really in the independent fab business or against independent fabricators as opposed to into the mill segment itself.
Luke Folta, Jefferies Group LLC
Got it. Okay. Then just as a followup on M&D, another very strong quarter there, it continues to be a bit of a black box from an outsider’s perspective looking in. Can you give us some sense of what the moving parts were? We have definitely seen what looks like an inflection over the last couple of quarters and profitability in that business. I know Australia being out of it is a factor, but anything that you can help us think about in terms of what we should be monitoring or how should we think about the profitability and particularly margins in that business over the looking-forward year.
