Rail Industry Trends Article
Rail industry data and trends from Progressive Railroading February 2012

Auto Business Growth Likely In 2012, Industry Forecaster And Class Is Say

U.S. light vehicle sales will continue to grow in 2012, according to the automotive market analysis firm Polk — and at least some Class Is anticipate benefiting from that growth.

U.S. light-vehicle sales are projected to grow 7.3 percent to 13.7 million vehicles, a "moderate pace" primarily due to 2011's "relatively strong" year for sales, Polk officials said in a prepared statement issued Jan. 3. The firm's analysts don't expect the U.S. market to return to pre-recession annual sales levels of greater than 16 million vehicles until 2015, they said.

Meanwhile, in their 4Q and 2011 year-end financial teleconferences and webcasts last month, senior executives at some Class Is attributed 2011 traffic volume increases in part to rising automobile sales, and said they expect that trend to continue in 2012 and beyond.

"The long-term automotive outlook is very bright," said Patrick Ottensmeyer, executive vice president of sales and marketing for Kansas City Southern, where 4Q automotive volume rose 22 percent and revenue climbed 30 percent year over year. "Four planned new assembly plants in Mexico and some expanded plants are expected to increase Mexican finished vehicle production by nearly 40 percent by 2015."

Report: U.S. Jobs Picture Will Sharpen In Most Areas

The number of new cars sold this year will depend in part on the employment rate. So, what will the hiring trend look like in 2012? A recent forecast that IHS Global Insight prepared for the U.S. Conference of Mayors predicts all but three of the nation's 363 metro areas will see employment growth.

By 2012's end, non-farm payrolls are projected to grow by 1.3 percent, and the nation will have regained 48 percent of the jobs lost during the Great Recession, stated the report, "U.S. Metro Economies: 2012 Employment Forecast and the Impact of Exports."

Growth will come primarily from the following sectors: trade, transportation and utilities; education and health services; professional and business services; and leisure and hospitality, the report states.

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