Global Connectivity

Global Connectivity

Transportation is an essential component of the domestic and world economy.  As a sizable element of the country’s gross domestic product, transportation employs millions of people and consumes substantial goods and services. It also enables economic growth and development. Transportation contributes to economic activity and to a nation’s global competitiveness as a service, an industry, and an infrastructure. It affects the price competitiveness of domestic goods and services because final market prices incorporate transportation costs.

Productivity in various parts of the transportation sector

  • Labor productivity for the rail sector increased 65 percent from 1993 to 2003. Despite a decline of 6 percent between 2000 and 2001, air transportation labor productivity grew 32 percent over the entire period from 1993 to 2003. (Table A-1 in Chapter 2)
  • Multifactor productivity of all business sectors combined increased 10 percent between 1991 and 2001, while multifactor productivity in air transportation increased 16 percent. Data are not available for the same period for rail transportation, but between 1991 and 1999, multifactor productivity in this industry increased by 26 percent (an annual rate of 3 percent). (Table A-2)

Transportation costs for passenger travel and goods movement

  • U.S. households spent almost $7,500 on average on transportation in 2004 – second in spending behind housing. (Table G-3 in Chapter 2)
  • Driving an automobile 15,000 miles per year cost 56¢ per mile in 2004, or 44 percent more than it did in 1994, when total costs per mile were 39¢. (Table G-6)
  • For those using transit, the average fare ranged from 88¢ to $1.02 between 1995 and 2005. (Table G-4)
  • On average, intercity trips via Amtrak cost $49.08 in 2005, up 23 percent from $39.92 in 1995. Meanwhile, average intercity Class I bus fares rose 50 percent, from $20.10 to $30.11 between 1995 and 2002. (Table G-4)
  • RITA’s BTS Air Travel Price Index (ATPI) comprises three indexes: U.S. origin flights, foreign origin flights, and combined U.S and foreign origin flights. The ATPI “ U.S. origin only” index increased 17 percent between the first quarter of 1995 and the second quarter of 2006. During the same period, the ATPI “Foreign origin only” index decreased 3.6 percent. (Table G-5)

(BOX 3)

Transportation-related variables that influence the domestic economy and global competitiveness

  • U.S. prices for transportation goods and services in 2002 were relatively lower than prices in 19 out of 24 Organization for Economic Cooperation and Development countries. However, one of the nation’s top merchandise trade partners, Mexico, had lower relative prices in 2002 than the United States. (Table M-1 in Chapter 2)
  • The United States traded $356.7 billion (in current dollars) of transportation-related goods (e.g., cars, trains, boats, and airplanes and their related parts) in 2005 with its partners. As is the case with its overall international trade, the United States had a merchandise trade deficit in transportation-related goods (with an excess of imports over exports) totaling $82.3 billion in 2005. (Table M-2)
  • U.S. trade in transportation services in 2005 totaled $151.3 billion (in current dollars). The United States had a surplus in transportation services from 1995 through 1997. The trade surplus was highest in 1995. By 2005, however, 58 percent of trade was imports (payments to foreign countries), resulting in a trade deficit of $25.0 billion. (Table M-4)
  • Transportation-related demand accounted for more than 10 percent of U.S. Gross Domestic Product in 2004. This broad measure includes consumer and government purchases of goods and services ranging from vehicles, fuels, and insurance to road building and public transportation. (Table M-6)
  • The contribution of for-hire transportation industries to the U.S. economy, as measured by their value added (or net output), increased (in chained 2000 dollars) from $242.7 billion in 1995 to $335.2 billion in 2005. In the same time period, this segment’s share in the GDP fluctuated slightly, at around 3 percent. (Table M-5)
  • More than 12 million people worked in a transportation-related job in the United States in 2004. That is equal to approximately 1 out of every 10 workers. (Table M-7)