Transportation
U.S. Transportation Infrastructure Threatened by Fiscal Cliff
Published:
Last Updated:
The Fitch report focuses on debt financing issued to public transportation-related facilities like airports and shipping terminals. For publicly financed roads, bridges, and tunnels the agency sees a relatively small loss (compared with the recession of 2008-2009), but does see challenges to “completely offset” lower traffic or to meet debt service obligations that will be growing.
Regarding airports, Fitch says:
In general, Fitch would expect that passenger volumes would range from roughly flat to a 5% decline as a consequence (of the fiscal cliff) … . In contrast, Fitch’s base case expectation for U.S. economic growth in 2013 would produce growth between approximately 1% and 4% in the airport sector.
At U.S. ports, imports would fall as consumer confidence and spending fall, and exports would also be expected to decline as a result of a U.S.-led recession that would contribute to lower growth in export markets.
It’s not too difficult to see how the impact of the fiscal cliff on publicly-owned transportation facilities would affect private companies like airlines, shipping firms, railroads, and trucking. If financing becomes harder to get, facilities could be forced to cut back on various services and defer expansion because it will be difficult to muster political support for increasing tariffs yet again.
The Fitch Ratings report is available here.
Paul Ausick
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.