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8/22/2013



Rail News: Rail Industry Trends

Track construction industry in healthy revenue-growing period, IBISWorld says


The railroad track construction industry has been steadily increasing revenue since 2010, according to a report recently issued by market research firm IBISWorld.

In a five-year period ending in 2013, the industry's revenue is expected to grow at an annualized rate of 1 percent, to $4.3 billion, including a 4.3 percent gain this year, the report states. IBISWorld defines industry constituents as companies that construct track, install ties and perform other rail infrastructure work, as well as construction management firms and special trade contractors that build track and transit systems.

"Higher shipment volumes of manufactured goods, as well as an increasing volume of imported products into the United States, has helped fuel the industry's post-recession growth," said IBISWorld industry analyst Sean Windle in a press release. "Many of these goods are transported via freight train. As existing rail lines are used more frequently, the demand for repair and maintenance-related construction work has increased."

Federal spending programs, such as the American Recovery and Reinvestment Act of 2009, have allocated billions of dollars for track construction work and other transportation initiatives, the report states.

In the next five-year period through 2018, industry growth is forecasted to accelerate.

"Several different factors will contribute to this strong revenue growth, including more investments for rail transportation projects at the local and state government level, and increasing demand for the shipment of manufactured and imported goods via rail," IBISWorld officials said. "Additionally, several high-speed rail projects are set to break ground over the next five years, which will further bolster industry demand."



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