The obvious bellwether statistics on the economy include gross domestic product, foreign trade, the inflation rate, interest rates and labor market statistics. Then there is also industry sub-sector data such as retail sales, car sales, office vacancy rates and capacity utilization rates.

But there are also a number of other indicators that may not receive quite as much attention. Statistics Canada, particularly in its report entitled The Daily, is an excellent source for some of the more significant, but less reported, data on the economy.

For example, railroad traffic is sometimes taken to be a proxy for overall economic activity in the country. From data on RR traffic, there is much to be learned about the movement and sales of commodities and manufactured goods.

This has implications for the direction that future construction investment might take.

In the July 28 edition of The Daily, Statistics Canada reported the total volume of cargo carried by Canadian railways in May 2010 increased 20.6% versus the same month last year.

Such data on railway car-loadings is the sum of total freight both originating in Canada and received from the United States.

Of course, last year was a period of particular weakness in the economy as both the U.S. and Canada were in the grip of recession.

Nevertheless, the large year-over-year percentage increase is gratifying to see and a good indication of the extent to which recovery is proceeding.

Railway traffic comes in two forms – intermodal and non-intermodal. The former consists mainly of containers and trailers loaded onto flat cars. This is cargo that is hoisted to and from freighters and trucks (the intermodal aspect) by means of giant cranes.

Non-intermodal cargo is either carried in box cars or consists of bulk loadings.

Intermodal cargo increased 10.7% in May 2010 versus May 2009. Non-intermodal cargo was up 19.2%.

In the non-intermodal category, coal, potash, iron ores, iron and primary and semi-finished steel were the commodities with the largest gains. This suggests two influences – fulfillment of demand from China and Southeast Asia and an improving North American automotive sector.

Drops in tonnage were recorded by canola, wood pulp, wood chips and lumber. The shortfall in overall demand in the U.S. versus capacity remains a drag on merchandise trade activity, as does the extreme weakness in housing starts across the border.

Rail traffic coming from the U.S. increased 48.3% this May versus last year’s May.

A final note of interest is the regional distribution of the railway car-loadings. Assume an imaginary line is placed between Thunder Bay and Armstrong Ontario. The split nationally in May was 57% from Thunder Bay west and 43% from Armstrong plus points east.

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News. Mr. Carrick also has a lifestyle blog that can be reached by clicking here.

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