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Energy sector may not be able to power 2019 carload growth

The railroads’ carload business benefited from a booming energy sector in 2018, but it may not be able to count on that continuing in the new year. The problem for carriers is that alternatives to replace energy in the carload or intermodal sectors appears limited. The carriers have struggled to provide

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GOING WITH THE FLOW TOWARD INTERMODAL, E-COMMERCE

Preliminary data in from the Commodity Flow Survey highlights known shifts in transportation. Every 5 years the government gives us a comprehensive view of transportation. Preliminary data from the Commodity Flow Survey (CFS) covering 2017 became public on December 6, and some of it tells us what we already know. For example, truck

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December 2018 – Residential Construction

Residential Construction ■ Residential construction rebounded partially in October. Housing starts increased 1.5% from September to an annual pace of 1.228 million units. The multi-family sector led the increase, rising 10.3% to 363,000 units. Single-family starts fell 1.8% to 865,000. Near-term construction does not bode well, as total permits fell 0.6%. Total starts in October were…

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December 2018 – Manufacturing

Manufacturing ■ The ISM manufacturing index backtracked slightly in October, falling from 59.8 to 57.7. The index remains elevated, but new orders fell to 57.4 from 61.8. Production retreated to 59.9 in October from 63.9 in September. The index is off from its peak of 61.3 in August, suggesting some moderation in the industrial side in…

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December 2018 – Consumer

Consumer ■ Retail sales increased a stronger than expected 0.8% in October, following a 0.1% decline in September. Gasoline stations were the growth leader, rising 3.5%. Motor vehicles and parts sales increased 1.1%. Other leaders were department stores and building supply shops. Sales excluding autos rose 0.7%, and excluding autos and gasoline increased 0.3% in October.…

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December 2018 – Economic Summary

Summary ■ The economy has good momentum heading into 2019.Third quarter growth was at a 3.5% annual rate and growth is likely to top 3% in the fourth quarter. Further moderation is expected in 2019 as the effects of the fiscal stimulus and tax cuts fade. In addition, the impacts of higher interest rates

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Tariffs, Energy support carload growth rates, but for how long?

Rail carload growth is being supported by volumes moving in advance of expected tariffs, that were set to go into effect on 1 January, and a robust energy market. However, these two supports could be quickly undermined in the new year. The tariffs that caused at least some pull forward of

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Industry Focus – U.S. Auto Outlook

There are three major coal-producing regions in the United States. Eastern Coal is produced in the Appalachians, in a band running from Pennsylvania down into central Alabama. Interior Coal comes chiefly from western Indiana, eastern Illinois, western Kentucky, and Missouri. Western coal comes from a band running from the Powder

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December 2018 – Rail Service

Rail service remains stable in the most recent weeks, but is starting to show some signs of improvement. This year’s velocity remains below 2017 and the historical average, but there has been some movement toward the 2017 mark. Dwell times have reduced significantly recently, and are now approaching the historical 10-year

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December 2018 – Carloads

■ October carloads up strongly: October carload growth of 4% compared with the 2017 period was well in excess of the 1.7% growth predicted for all of 2018. ■ It also exceeds the 3.4% recorded in the third quarter on a seasonally-adjusted basis, suggesting a robust finish to the year. ■ Part of the momentum is from the

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