DALLAS -- Large airports will continue to outpace smaller regional facilities in the second half of the year but all transportation sectors should see slow but steady growth through the remainder of 2014, Fitch said in a new sector outlook released Thursday.
The rating outlooks for ports, airports, and toll roads likely will remain stable, "with positive sector movements unlikely over the near term due to slow growth expectations," Fitch said in its fall 2014 transportation trend outlook.
All sectors should be able to maintain sufficient pricing power to ensure rate increases can keep up with inflation despite the tepid volume growth, according to the rating agency.
"Positive is the correct way to classify transportation," said Seth Lehman, a senior director at Fitch. "The growth may not be robust, but it is slowly returning to at least a healthy rate of growth."
Airline passenger traffic, port volumes, and toll road activity are closely linked to the health of the U.S. economy, Lehman said. As the economy continues to gain strength, transportation will ride along with the rising tide, he said.
Airports will see more passengers and toll roads can expect more traffic as economic activity increases, aided by declining energy prices that benefit airlines as well as motorists, Lehman said.
"Business growth at ports, especially the larger ports, is mostly affected by increases in imports," he said. "A rising economy will mean even higher volumes of trade through sea ports."
U.S passenger enplanements grew at a modest 1.8% in first six months of 2014, an increase from the 1.4% growth rate during the same period of 2013. But traffic levels are expected to pick up at a slightly higher rate. Fitch said it expects an overall 2% increase for the year due to more airline seating capacity and the improved economy.
"The major carriers appear to be in solid operational and financial footing, taking advantage of healthy demand and a stabilizing environment for fuel costs," Fitch said.
Airport growth is not consistent across the sector, Fitch said, with airports serving major domestic markets or international destinations doing better than small market and secondary hub airports.
Most of the airports rated by Fitch saw traffic growth in the first half of 2014, with 22% of them posting increases of 3% or more.
Toll roads have posted traffic increases in 2014 in contrast to sluggishness in total vehicle miles traveled, said analyst Tanya Langman.
Traffic on toll roads rated by Fitch grew steadily in the first half of 2014, despite bad weather in January and February that caused monthly declines, she said.
"Toll roads got off to a slow start early this year, but still posted a 5% increase in vehicle-miles-traveled while the national numbers were barely positive," she said.
Traffic growth on Southeast and Southwest toll road have far outstripped increases in the Northeast, Midwest, and West so far in 2014 and that should continue for the rest of the year, Langman said.
U.S. ports had positive results in the first half of 2014, with 80% of them showing volume increases from 2013. The sector posted an overall 4.1% increase through June.
Fitch expects modest improvements in port activity throughput in 2014, as global macroeconomic trends continue to encourage more world trade.
Most of the capital projects at coastal ports are aimed at accommodating ships capable of transiting the enlarged Panama Canal in 2016 and dealing with scheduling challenges. The larger ships could create congestion, Fitch said.
