Written by Steven Hansen
Rail movements contracted in February 2012 compared to February 2011.
- carloads down 1.9% year-over-year
- intermodal (containers or trailers on railcars) up 2.4% year-over-year
- total carloads plus intermodal down 0.1% year-over-year
Econintersect uses rail movements to add to understanding of economic dynamics in coming months. As long as growth remains positive, it bodes well for a positive economic outlook.
As coal comprises well over 40% of all commodities transported, and coal has major demand fluctuations unassociated with the economy – the below graph removes coal from the equation – and shows a 5.5% gain year-over-year.
The AAR highlighted in their report that it is not only coal which is causing the data wobble, but also grains (whose decline in transport also has little to do with economic drivers – only the profitability of the railroads).
The graphic below compares non-seasonally adjusted total rail movements year-over-year.
Most finished consumer goods which travel on rail move in intermodal units, containers and trailers, on rail cars. If there was only one pulse point to watch – it is this one. It shows positive (and weak) year-over-year growth. A caveat here: this needs to be viewed with trucking data to get a complete picture – as this same service is provided by both modes of transport.
Rail is the first reporter of February 2012 data. So far other major transport indicators are mixed but the January data is showing weak growth:
- Pulse of Commerce Index – diesel consumption (January 2012): Down 2.2% year-over-year.
- Truck Transport (January 2012): Up 3.6% year-over-year
- Rail (January 2012): Up 0.8% year-over-year
The negative numbers in the Pulse of Commerce Index are likely due to an efficiency increase – and not economic contraction. All important rail trend lines show economic activity is continuing to grow in February.