United States Freight Transport Report Q2 2013

BMI maintains its cautiously positive outlook on the US freight sector. In light of the fiscal agreement
reached at the beginning of 2013, we have revised up our US real GDP growth forecast to 2.3% from 2.1%
for the year. However, our general outlook for a slow and erratic growth path for the US economy remains
in place. The biggest near-term economic issue – the tax hikes that were set to kick in on January 1 2013 as
part of the fiscal cliff – has been resolved, though there will continue to be uncertainty ahead of the debt
ceiling negotiations and the sequester spending cuts due to come into effect in March.
US freight volumes face headwinds in the form of sluggish private consumption recovery and slow demand
for exports. US private consumption will continue to recover very slowly as a combination of still-high
unemployment, ongoing deleveraging, low wage growth and a dependency on government transfers
continue to weigh on spending growth. The US export sector is likely to face increasing headwinds from
abroad, centred around reduced European demand amid a eurozone recession and potential for dollar
strength. Just under one-quarter of US exports go to the European Union, and the European crisis is likely to
impact upon non-eurozone demand for US goods and services.