The predictive power of an experimental transportation output index

Abstract

A monthly output index for the US Transportation sector over January 1979–June 2003 is reported covering air, rail, water, truck, transit and pipeline activities. Separate indexes for freight and passenger are also constructed. The strong cyclical movements observed in the transportation output appear to be well synchronized with the NBER-defined recessions and growth slowdowns of the US economy. The series reflects the profound impact of 9/11 on the transportation sector, especially on the airlines. By December 2002 it has reached its historical peak. Given the observed relationship of the transportation output with the economy, the recent upward trend in the freight transportation strongly suggests that both the sector and the overall economy have recovered from their latest slump.

Acknowledgements

This study has been supported by grants from the Bureau of Transportation Statistics, US Department of Transportation during 2001–2003. However, the contents of this paper reflect the views of the authors, who are responsible for the facts and the accuracy of the information presented herein.

Notes

¹ Using different concepts about the scope of the transportation industry would yield different measures of its importance, varying anywhere from 3.09% (Transportation GDP) to 16.50% (Transportation-driven GDP).

² The data sources are: Monthly Trucking Report of the American Trucking Association, Weekly Railroads Traffic (WRT) of the Association of American Railroads, FRA Accident/Incident Bulletin of the Federal Railway Administration, the Waterborne Commerce Statistics Center of the US Army Corps of Engineers, Petroleum Supply Monthly and Monthly Energy Review of the Energy Information Administration of the US Department of Energy, and APTA Quarterly Transit Ridership Report of the American Public Transportation Association.

³ The seasonal adjustment was done using the US Census Bureau's X12-ARIMA program with adjustment for trading day and holiday effects.

⁴ See Zarnowitz and Ozyildirim (2002) for more discussions on growth cycles.