Growth prospects remain healthy for all three major U.S. transportation segments heading into next year, though the trajectory figures to level off somewhat according to Fitch Ratings in its latest annual report.
The broader economy is proving to be resilient thus far amidst increased recession talk. Factors more likely to curb the rate of growth are more sector-specific ion nature, according to Transportation and P3s group head Scott Zuchorski. "Aircraft safety is under increased scrutiny, ongoing U.S./China trade tensions are creating strategic shifts in the shipping sector, and growth is diverging for toll roads throughout the country," said Zuchorski.
Air traffic remains quite healthy for U.S. airports and will remain so headed into 2020 with Fitch projecting 2.5%-3.5% growth overall. An ongoing development worth note is the Boeing 737 Max model, the return of which remains on ice. "Delays in delivery of new orders stand to become more widespread which will affect air travel performance the longer the Boeing 737 Max model remains grounded," said Senior Director Seth Lehman.
The most acute effect of escalating trade tensions between the U.S. and China remains ports with those in the West Coast increasingly susceptible to monthly volatility in volumes. Conversely, East Coast ports are seeing much stronger performance over the last few months with volumes increasing nearly 6% compared with the first half of 2018. "Some ports will face greater adverse effects based on their individual balance of trade as shippers try to beat tariff deadlines," said Senior Director Emma Griffith.
Growth for toll roads has tailed off substantially this year in part due to rising gas prices and the slower rate of growth seen in the broader U.S. economy. That could change heading into 2020, however, with toll roads the Southeast and Southwest likely to grow at faster rate thanks to strong demographics. "Revenues are likely to spike faster than traffic growth as many toll road authorities continue to implement inflationary toll hikes," said Director Scott Monroe.
Fitch's 'U.S. Transportation Trends - Fall 2019' report is available at www.fitchratings.com