The transportation sector should see growth for the remainder of the year, albeit at a slower rate than the first half of 2016, thanks in part to increased traffic, a strong dollar and low fuel prices.
Seth Lehman, Fitch Ratings senior director, expects to see passenger traffic grow by about 3% during the second half of the year, with much of the air passenger traffic coming from international hub airports. So far this year, all major U.S. carriers have experienced positive growth with the exception of United Airlines.
The nation’s ports should continue to take advantage of the stronger dollar driving imports as 20-foot equivalent units—a measure of cargo capacity—have been increasing at a higher rate than the GDP for the first half of 2016, Fitch analysts said. And while the industry focuses on big ship readiness in light of the expanded Panama Canal that opened for commercial traffic this year, “large-scale shifts in cargo are not expected, but some adjustments are possible,” Lehman noted.
Low fuel prices have worked to increase traffic to the US’s toll roads by some 6.3% as revenue has jumped by 7%, Fitch says. “The higher rate of growth in revenues is reflective of typical inflationary toll rate increases, which Fitch expects to average roughly 2% over time.”
- Nicholas Stern, editorial associate