All three major transportation sectors in the US – airports, ports and toll roads – have shown “sustained and improved growth” in the first half of 2015, a trend that will continue throughout the rest of this year into early 2016, Fitch said in its latest US Transportation Trends report.
The slow and steady acceleration is attributed to improving economic conditions, a stronger dollar driving imports and lower fuel prices.
While the ratings agency expects the trend to continue, it forecasts a more moderate pace in the second half of 2015 “reflecting slower economic growth outlook for the third quarter.” However, Fitch expects rating outlooks across all three sectors to remain stable.
In the first six months of 2015, US passenger enplanements grew 3.9 percent year-on-year, a stronger level of growth than the 3.1 percent achieved in 2014. International hub airports were the leading performers and Fitch expects passenger traffic growth to improve overall by 3.5 to 4 percent for the year.
Growth at US ports was more modest with throughput increasing 1.8 percent in the first seven months of 2015 compared to a 2.2 percent year-on-year increase seen in the last two quarters of 2014.
East Coast ports performed better than their West Coast counterparts, primarily due to labour slowdowns that affected the West Coast. “However, Fitch notes that West Coast ports have nearly recovered from the labour slowdowns as they enter peak season,” according to the report.
Port throughput is expected to grow in line with GDP growth, Fitch said. Another key trend within the sector is that capital improvements will continue to focus on enhancements aimed at accommodating larger ships travelling through the Suez and Panama canals.
Toll roads saw the highest growth rate in the transportation sector both in terms of traffic and revenue, each ranging between eight and 10 percent in the first half of this year. A main contributor to these results was the implementation of additional tolling points on the Miami-Dade Expressway (MDX), almost doubling transactions and revenue on the network.
Excluding MDX, traffic and revenue growth rates ranged between five-seven percent and seven-10 percent, respectively, Fitch said.
The Southeast and Southwest led traffic growth in the first half as they did in the latter half of 2014. They are expected to do so again in the remainder of 2015 and early 2016.
Photo courtesy of VDOT.