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Economic Trends Matter to Transport Demand
- Business cycle is forcefully alive and well in the world. Timing and size of recovery varies by country and region. Asia now leading.
- Inventory cycles of building and drawing down stocks are part of business cycle and for the freight system, magnify changes in underlying goods and transportation demand. Logistics costs and interest rates affect inventories.
- Overhang of public debt from fiscal stimulus remains a challenge where net payoff from infrastructure investments isn't clear.
- Financial markets affect business and consumer spending through (now more limited) availability of credit which limits spending to satisfy pent-up demand
- Pressure to minimize costs remains so supply chain evolution continues. Globalization is not dead or going to reverse though it will evolve.
- Demographics matter long-term. Country goods consumption and consequential freight demand depends on behavior and size of age cohorts across each economy.
- Environmental, safety, health, safety and labor policies all affect transport demand globally, with countries moving at different rates in adoption.