Transportation Economic Trends
Contribution of Transportation to the Economy:
Final Demand Attributed to Transportation
Transportation contributes directly to the economy. This page discusses gross domestic product (GDP)—a measure of economic activity—attributed to the demand for transportation relative to other goods and services. The contribution of transportation services to GDP is an alternative measure of transportation's direct contribution to the economy.
- In 2021, the demand for transportation ($1.9 trillion) accounted for 8.4 percent of GDP.
- Household purchases of motor vehicles and parts accounted for the largest portion (35.4 percent) of the demand for transportation in 2021.
- Adjusted for inflation, the demand for transportation increased by 9.2 percent in 2021, marking the highest year-over-year increase since 2002. The largest year-over-year decrease of 14.3 percent occurred in 2020.
- The large upturn in 2021 is due to an increase in personal consumption expenditures of transportation services (15.9 percent); motor vehicles and parts (15.8 percent); motor vehicle fuels, lubricants, and fluids (12.9 percent); as well as private investment in transportation (13.8 percent).
- Retailers of motor vehicles and parts saw two consecutive years of
negative change in inventories of $17 billion in 2020 and $45 billion in 2021.
The 2021 level marks the lowest level since 2002. The negative change in
inventories occurs when retailers keep their closing inventory level lower than
their opening inventory level. Economic downturns and supply-chain issues often
cause negative changes in inventories.
- More transportation-related goods and services were imported than exported in 2021; the largest difference since 2002.
Gross Domestic Product Attributed to the Demand for Transportation
Gross Domestic Product (GDP) measures economic activity, tallying expenditures on all final goods and services purchased by persons, businesses, governments, and foreigners in a country. Expenditures fall into five categories, with each a measure of the final demand for: healthcare, housing, food, education, and all other goods and services.
Expenditures on transportation (GDP attributed to the demand for transportation) are less than all categories except education and hence account for a smaller portion of GDP. However, transportation plays a vital role in the economy, as measured by GDP, by making economic activity possible. For example, transportation delivers the raw materials businesses need to produce goods and services.
Final demand attributed to transportation (shown here) offers one way to measure transportation's contribution to GDP. The contribution of transportation services to GDP offers another way.
Components of the Demand for Transportation
The demand for transportation is the sum of:
- Personal (household) consumption expenditures on motor vehicles and parts; motor vehicle fuels, lubricants, and fluids; motor vehicle and other transportation insurance; and transportation services (e.g., passenger airfare);
- Government investment in transportation infrastructure and purchases of transportation goods and services;
- Private domestic investment in transportation infrastructure and equipment;
- The change in retailers’ inventories of motor vehicles and parts; and
- Net exports (exports minus imports) related to transportation goods and services.
Personal consumption of motor vehicles and parts accounts for the largest component of the demand for transportation.
U.S. Department of Transportation, Bureau of Transportation Statistics, Transportation Economic Trends, available at www.bts.gov/product/transportation-economic-trends.
- Gross domestic product (GDP)
- Expenditures on final goods and services (demand for transportation)
- Contribution of transportation services to GDP (alternative measure of transportation's direct contribution to the economy)
- Use of transportation services by industries (transportation's indirect contribution to the economy)