Growth in railroad-shipping volume shows the U.S. economic expansion is gaining momentum, even with rising energy prices in the first quarter.
Total rail volumes excluding grain and coal shipments rose 7.9 percent to 4.6 million carloads in the quarter ended March 31, according to data compiled by the Association of American Railroads in Washington. It was the second-highest increase in a first quarter, following last year’s 9.3 percent rise.
“This is almost double the first-quarter growth rates of the last economic recession, during the 2003-2006 recovery period,” said John Mims, a transportation analyst in Richmond, Virginia, at BB&T Corp. Rail volumes were on the “high end” of his expectations for the first quarter, and his projections for the second quarter assume the pace of volume recovery will continue.
Rail-car shipments that exclude coal and grain, such as chemicals and metals, represent the bulk of materials that go into industrial production, so an increase in volumes bodes well for the broader economy, Mims said.
“We’ve had no indications from the rails that they’re pulling back on their projections for strong commodity shipments throughout the year, which is a strong indication that industrial production will continue to improve,” Mims said.
Tuesday, April 12, 2011
Rail Volumes Increasing