ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Sunday, January 7, 1996 TAG: 9601110127
SECTION: BUSINESS PAGE: D5 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
The trucking industry has a saying: "If you got it, a truck brought it." That means - the hyperbole of self-promotion aside - that anything you've bought has traveled on a truck at one point.
But the aphorism can also be stated in reverse and be equally true. That is, if people don't buy it, trucks - or planes and trains - can't haul it. The point is that the performance of transportation industries is critically linked to that of the overall economy.
In 1996, those in the transportation business are expecting moderate growth for the economy and their own portion of it.
"The economy hit the skids in the past few weeks," said Ken Simonson, an economist with the American Trucking Association. It's not a recession but a slowing of economic growth, he said.
Consumers, whose spending accounts for two-thirds of the gross domestic product, have grown cautious, Simonson said. "That means most of the economy will be running in low gear," he said.
Other factors contributing to a dampening of the U.S. economy, Simonson said, are a sluggish export market because of the recession in Japan, slow growth in Europe and a slowdown in business investment in this country.
Working in the economy's favor, he said, are low-interest, low-inflation and low-unemployment rates. Those factors will gradually restore consumer willingness to buy all sorts of goods, including big ticket items like cars, Simonson said.
"Overall I think it's going to be a year of gradual growth for the trucking industry," Simonson said.
Similar forecasts are offered for the airline and railroad industries.
Airlines, which have long depended on a strong air-cargo business to offset soft passenger loads, experienced a slow decline in air-cargo growth during 1995 and an actual decline over year-earlier figures in October, according to the Air Transport Association.
Locally, air freight will continue to be a "solid performer" at the Roanoke Regional Airport, although growth rates in air freight have begun to moderate, said airport spokesman Mark Courtney.
As for passenger traffic, Courtney said he was concerned about increases in fares for business travel, the meat of airlines' business. "I would like to see a more rational pricing structure for business travelers," he said.
The number of daily passenger flights departing the airport was down to 42 in October from 49 in January 1995, the most recent periods available for comparison. The passenger seats are adequate to meet demand, Courtney said.
The Roanoke airport will add four more daily flights this month as Continental Express begins four daily round trips to Newark, N.J.
If local economic conditions remain stable in 1996, Courtney said, he expects an increase of up to 5 percent in passenger traffic at the airport.
Good news for the airport is the improved financial health of USAir, the airport's major jet carrier. The Virginia-based airline still plans to finish 1995 with a profit, USAir spokesman Rick Weintraub said. The short-term outlook covering the first few months of this year also looks good, he said. "Beyond that the trend lines are so thin, I wouldn't want to make any prediction on them," he said.
For a time last fall, there was speculation about a possible acquisition of USAir by either United or American airlines. USAir hasn't hung out a "for sale" sign but is looking for possible alliances with other airlines, Weintraub said. "USAir is now primarily an East Coast system; we'd like to expand that," he said.
For the railroad industry overall, leading economists are predicting a 10 percent growth in earnings this year, said Harry Levine, chief economist for the Association of American Railroads. Levine isn't making any predictions himself because of labor contract negotiations under way that involve many of the nation's major rails.
Most of the rail industry's business, 75 percent of it, rises and falls with the economy, Levine said. Forecasts call for a 2.5 percent to 3 percent growth in productions next year and a reasonable person would conclude rail traffic should be up as much as the economy, he said.
Norfolk Southern specifically is looking for a year of generous but not outstanding growth, according to Don Bourquard, NS' director of market research and economics.
Norfolk Southern's coal-hauling business, which provides 28 percent of company revenues, should be improved this year because of better export business and improved industrial growth and utility demand at home, Bourquard said.
Although automobile sales may remain flat, NS' auto-hauling business should be better because the reopening of idled General Motors plants on NS track in Atlanta and Kansas City and increased production at the new BMW plant in South Carolina, he said.
The number of land-sea containers that NS hauls also should grow this year because of improved international trade, Bourquard said. NS' cooperation with other railroads in the handling of the intermodal containers enhanced the growth of the intermodal business, he said.
LENGTH: Medium: 90 linesby CNB