Industry Trends from Progressive Railroading June 2010

Trade Gap Widens While Imports, Exports Head Up

The trade gap widened to $40.4 billion in March vs. $39.4 billion in February, but there were increases in both imports and exports, with imports rising 3.1 percent and exports going up 3.2 percent, according to an analysis from IHS Global Insight.

Despite the widening of the trade deficit, the report was positive for the U.S. and global growth outlook because the import and export gains indicate the world trade recovery still has momentum, according to IHS Global Insight Chief U.S. Economist Nigel Gault.

The trade data didn't affect an estimated 3.2 percent growth of the Gross Domestic Product in the first quarter, IHS believes. However, it could have affected the estimate of business equipment spending, which probably was pulled slightly lower, Gault said.

Report: Global Infrastructure Faces $2 Trillion Deficit

The world faces an infrastructure deficit of $2 trillion annually over the next 20 years, according to a report from the World Economic Forum.

The report, which analyzes the four largest infrastructure markets — Brazil, China, India and the United States — states the role of the public sector is vital in correcting the deficit. Investments in infrastructure can reap benefits that accrue over a long period of time and in a manner that reap societal and economic benefits, according to the report.

Infrastructure development is most successful where the public sector has a clear development plan and where the infrastructure development plan is coordinated at the highest levels, according to the report.

The 11th five-year plan for energy development by the National Development and Reform Commission of the People's Republic of China is highlighted in the report as an example of a plan that sets specific goals for the development of energy infrastructure in that nation.

There also is a difference between developed and developing countries, the report states. Developing countries focus on increasing the capacity of infrastructure systems, while developed countries seek to optimize existing infrastructure systems through the use of incentive mechanisms.

The report also shows that in most successful infrastructure projects, the private sector has been involved with the full lifecycle of a project in public-private partnerships where the private and public sector cooperate to augment a project's efficiency.