We’ve spoken a lot about traffic volumes over the past few weeks on this blog – and for good reason too: there are some strange things going on with traffic volumes on state highways now static for around seven years and vehicle kilometres travelled on both state highways and local roads in the Auckland area increasing at a much slower rate than population growth over the past five years. Needless to say, these trends are pretty much unheard of previously – in that for close to a century traffic volumes have just gone up, up and up (world wars excluded, I imagine).
The trend is not just limited to New Zealand though, here’s a graph showing the 12 month rolling total of vehicle miles travelled in the USA since 1970: 
Showing a comparison with times of recession is useful because often when you point out to people that traffic volumes aren’t increasing, the first response is “but that’s just due to the recession”. Looking at the above graph you can see that in a recession it’s normal for volumes to flat-line or even decrease. Yet outside recessionary times there’s almost always an increase in volumes – aside from what looks like a time period which coincided the 1979 energy crisis.
That is until recently. While obviously the world’s recovery from the 2008 global financial crisis has been slow, having VMT flat-line and then quite sharply decline in very recent times, outside a recessionary period, is quite unprecedented. Something very different is happening here, a big reduction in traffic volumes even when the economy is growing. It would be interesting to run a comparison for New Zealand – something that the Ministry of Transport should be doing but I suspect aren’t because their heads are stuck in the sand just as much as the Minister’s.
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??? America is no longer in a recession ???
What are they at, 18% under employment?
A recession is negative growth regardless of employment figures. The US just has really tiny positive growth at this stage, but no reverse in GDP since 2009.
The US isn’t at 18% unemployment latest figures indicate it is at around 8-9%, so not much different to NZ, and growth this year is approximately 3-4%, which it should be noted is around double that of Germany, which is itself the highest of any country in the eurozone. The UK has become the first developed economy since the 40’s to have a double dip recession, and Spain in comparison has around 50% youth unemployment. So no the US is no longer in recession.
There have already been several posts about the decline in traffic volumes in the US and the corresponding pattern in NZ – I’m not sure what this post brings to the table that Patrick R or others haven’t already dealt with in depth earlier.
There’s no question that the national mood in the US is recessionary, and some of the reduction in unemployment figures is due to people not even seeking work. The US is not in better shape than other developed countries. The NZ economy, however fragile and dependent it may be, is in MUCH better shape than the US.
The real story is that the developed world now has to invent a different source of economic growth. They have been through the primary production, industrial, and valuation bubble models of “wealth creation” and these are all done. What can they do next?
It will be interesting to see if some of the reduction in traffic will translate into permanent change if and when there is new economic growth.