Railroad Data Suggests No Economic Growth in May 2011

Depending on how you look at the American Associations of Railroads May 2011 data, this was an “okay” month or a bad month.  If you look at the data overall, it was flat viewing it on a year-over-year (YoY) basis.

Rail traffic remains well under its 2006 peak, and the growth is flat against 2010.  The fly-in-the-ointment is growth is coming from a single sector of rail transport – intermodal which is the transport of containers and trailers on rail cars.

When intermodal rises on railroads, trucking tonnage falls.  The graphs below separates intermodal and commodities.

Intermodal is almost at all time record levels, while commodities are barely above 2010 levels.

In May 2011, just 8 of the 20 carload commodity categories saw gains compared with May 2010, the lowest number since November 2009 (see the table on the top right of the next page).  For the first five months of 2011, 15 of the 20 commodity categories saw carload gains compared with the first five months of 2010.

Rail data is confirming the economy has hit a soft spot.  Was weather a factor?

There’s no question that rail traffic in May was affected by extreme weather events (e.g., floods and tornadoes), but it’s not possible to precisely quantify the effect. America’s freight railroads are a 24/7/365 business operating over what is, in essence, a 140,000-mile outdoor assembly line. At any particular time, bad weather is disrupting rail operations somewhere. In part because they have to deal with the effects of bad weather so often, railroads are very good at restoring their operations afterwards to normal or near-normal levels relatively quickly. Of course, some weather events are worse than others in terms of the damage they cause and the extent to which they disrupt rail operations.

Related Articles:

Container Imports & Exports Grow in April 2011 by Steven Hansen

Diesel Usage Less Good – Is the Economy Slipping? by Steven Hansen

Railroads: April 2011 Is Less Good by Steven Hansen

Trucking Tonnage Increases in March 2011 by GEI News