North American small railroads just reported their best traffic numbers in over a year, thanks to surging demand for, yes, construction materials.
Short-line railroads are an interesting barometer for domestic U.S. activity given that they tend to have only a small contribution from intermodal (ship-to-train) cargo from abroad. They also have a relatively small contribution from recently regulation-manipulated U.S. auto shipments.
RMI’s RailConnect index — a snapshot of volume for 340 short lines and regional railroads in North America – showed participating carriers originated 100,521 shipments of all cargoes in the week ending April 24, up from 98,986 a week earlier.
Compared with a period last year when traffic was falling rapidly, the latest weekly volume was up 21.94 per cent from the same 2009 week. It put year-to-date short line traffic 6.64 per cent ahead of the first 16 weeks last year.
For the latest week, RMI said loadings of chemicals, the largest category for small rail lines, increased to 15,554 new units from 15,043 in the April 17 week. That is below the highest levels this year but in the upper range. The chemicals strength is in line with solid factory demand for inputs, and with demand for fertiliser as farmers plant spring crops.
A range of construction materials also swelled the latest shipment totals, led by new loads of site preparation stone, sand and aggregates at 12,483 railcars, which is close to the previous week’s strong level of 12,870, which was the highest in many months. Lumber and forest products took up 4,242 carloads, a jump from 3,880 as of April 17 and the strongest so far this year.
Is this construction materials jump a sign of U.S. property activity picking up? It seems like it, unless most of this is going for export.
Here’s the full breakdown of data below, via RMI. It gives a pretty nice view of physical activity within the North American economy: