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 2018 the demand for transportation ($1.9 trillion) accounted for 9.4 percent of GDP.
- Purchases of motor vehicles and parts accounted for the largest portion (27.0 percent) of the demand for transportation in 2018.
- Adjusted for inflation, the demand for transportation increased 3.2 percent in 2018—primarily due to increased private investment in transportation.
- Private investment in
transportation grew 6.7 percent in 2018 (adjusted for inflation)—the first year of
growth since private investment in transportation peaked in 2015.
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) is less than all categories except education and hence accounts 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.
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 air fare);
- 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.