Orlando, Fla. — In America, we all know who drives the economy. Transportation makes economic activity possible by enabling the production of goods and services—for instance, in carrying the raw materials needed to manufacture goods. Transportation also serves as a major economic activity itself. Households, businesses, and the government directly consume transportation goods (e.g., vehicles and motor fuel) and services (e.g., public transit and commercial airline transportation) to meet their travel needs. The Bureau of Transportation Statistics has come up with the most recent report about the contribution of the transportation sector.
The 2017 Transportation Economic Trends
Here are some of the most important highlights related to our industry:
- The transportation and warehousing sector and related industries employ over 13.0 million people in a variety of roles, from driving buses to manufacturing cars to building and maintaining ports and railroads.
- Truck transportation is the largest subsector, employing 29.2 percent of the 4.9 million forhire transportation employees in 2016. Truck transportation employment grew by 29.5 percent between 1990 and 2016, from 1.1 million to 1.5 million employees, with significant fluctuations related to major economic events such as September 11, 2001, the Great Recession, and other economic recessions. Warehousing and storage employment grew by 125.1 percent, from 406,600 to 915,100 employees, to become the second-largest subsector, overtaking air transportation in 2004.
- Low-wage transportation occupations, like truck drivers and household movers, account for a much larger share of the transportation workforce than high-wage occupations like airline pilots. As a result, the average compensation for transportation-related occupations is $6.35 dollars per hour less than the average for all occupations as of the first quarter of 2017.
- Water transportation experienced the second largest increase in MFP, growing 49.3 percent from 1990 to 2014, despite declining 15.2 percent from 1997 to 2003. The MFP of rail transportation grew steadily over the entire period but more slowly, increasing 34.2 percent.
- Following a decade of relatively stable fuel prices in the 1990s, fuel prices began to increase. Gasoline, No. 2 diesel fuel, and kerosene spiked to over $3.00 per gallon in 2008. While declining sharply during the 2007 to 2009 recession, fuel prices began to rise again, rising above the 2008 price just after 2011. Since peaking in 2012, prices declined in 2013 through 2016. In 2015 prices declined below the 2009 low for kerosene and diesel fuel, while prices declined below the 2009 low for regular gasoline in 2016. Railroad diesel fell to about its 2009 level in 2015.
- Truck transportation’s MFP (multifactor productivity) grew marginally at 9.8 percent, while the transit sector experienced a decline of 7.2 percent.
- State and local governments collected $247.3 billion of the $355.7 billion (69.5 percent) in government revenues. Of this revenue, the state and local governments collected $129.4 billion from transportation-related activities, most of which is from highway revenue sources ($86.7 billion, or 67.0 percent of transportation revenue in 2014), which include fuel taxes, motor vehicle taxes, and tolls (figure 7-4).
- In 2016 private and public spending on new transportation construction and improvements totaled $133.2 billion (figure 8-6). Public transportation construction accounted for 90.8 percent of that amount ($120.9 billion), and private transportation construction accounted for the remaining 9.2 percent ($12.2 billion). Highway and street construction accounted for 74.9 percent of public spending on transportation construction ($90.5 billion), and construction for air, land, and water transportation facilities accounted for the remaining 25.1 percent ($30.4 billion). Although the amount and composition of construction varies from year to year, the value of new transportation construction and improvements put in place has increased an average of 4 percent per year since 2002, dropping slightly in 2011 (when transportation stimulus funding in the American Recovery and Reinvestment Act of 2009 ended) and in 2016.
Taking a look at the quantified contribution of the transportation industry to the U.S. economy just reiterates what we know about this important sector: it makes economic activity possible and serves as a motor to the U.S. Economy.