Light & Commuter Rail Project Spending Still Rocketing Forward Through the Next Three Years

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Researched by Industrialinfo.com (Industrial Info Resources; Houston, Texas). For the past ten years, light and commuter rail spending has been breaking all past records for spending on an annual basis. More and more starter systems and expansions of existing systems have been planned, designed, engineered and built then ever before. The next three years will continue to increase this massive spending trend in an ever growing and increasingly popular method of alleviating traffic and environmental concerns in North American cities.

Currently, Industrial Info Resources is tracking close to 100 active projects that are worth in excess of $66 billion and scheduled to begin construction over the next three years. These numbers are extremely close to the numbers tracked at the beginning of 2005, with approximately 25 additional projects in the planning stage and with only minor spending decreases (around $3 billion less). Gap measurement shows us that the light and commuter rail industry is an extremely resilient one with less then 1% of the projects planned at the beginning of 2005 being canceled over the course of the year.

Click on the image at right to view the chart

The passage of the new Transportation Act in the fall of 2005, should only boost the actual spending numbers in the next few years. With the federal money now assured, for the most part, more projects should make it to the construction stage then ever before. Typically, light and commuter rail projects are financed by spreading the financial burden amongst the local, state and federal agencies involved in these types of projects. This usually means that the city and state must come up with around 50% of the financial expenditure with the federal government footing the bill for the balance of the cost. Due to the high cost of these types of projects, this type of financial arrangement has made the development of these projects easier for the state and local officials.

Light and commuter rail projects have been springing up all over the country in the last decade. One of the historically largest developers of these types of projects has been the state of California. With the state’s stringent environmental laws, light rail and commuter rail have been a savior for the transportation industry in the state. As a result, almost every city and town has either built a system, is planning to build a system or has a system under construction now. In addition, if they have already built a light or commuter rail system, those cities are now considering expansions of those systems in the next few years. Because of California’s gung-ho light and commuter rail attitude, expenditures in that state are the primary reason the West Coast region is the leader in overall rail spending with over $32 billion worth of projects currently in the planning, engineering or construction stage. The backbone of this incredible expenditure total is the proposed $25 billion high-speed rail system currently being planned to run from San Francisco to San Diego.

Click on the image at right to see a chart showing the breakdown of spending by region

Coming in second place, in terms of future light and commuter rail expenditures, is the Northeast region of the country. Currently, we are tracking almost $11 billion in planned or under construction light and commuter rail projects in the states of New Jersey, New York, Pennsylvania and Delaware. Companies such as SEPTA and New Jersey Transit have been forerunners in the light and commuter rail industry for decades and are continuing to spend incredible amounts of money each year to improve and/or expand their existing systems.

Rounding out the top five spending regions in North America is the Mid-Atlantic region ($7.2 billion), the Southeast region ($4.7 billion) and the Midwest region ($2.5 billion). When compared to early 2005 figures, the West Coast’s spending numbers remain essentially the same, the Northeast is down by about $900 million, the Mid-Atlantic is up by $1.6 billion, the Southeast is down by around $700 million, and the Midwest will increase spending by around $1.7 billion in the coming years.

All in all, the light and commuter rail industry continues to be a spending beast. The passage of the Transportation Act should only enable this trend to continue in the coming years. With a huge upside and minimal potential problems, light and commuter rail projects will continue to be a highly popular method of combating a city’s transportation problems for years to come.

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Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 22 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.