Fitch Ratings: U.S. transportation downshifting to relative calm in 2024

2024 looks to be a less volatile year for U.S. transportation as the U.S. economy heads towards a possible slow down, according to Fitch Ratings in its 2024 outlook report for the sector.
Fitch economists are calling for the U.S. economy to slow progressively in 2024 as higher interest rates and a deceleration in bank credit weigh on consumer spending and private investment. Fitch is keeping its sector outlook for airports, toll roads and ports at ‘neutral’ in spite of the broader economic picture.
“Airports, toll roads and ports have remained remarkably resilient in the face of a more volatile economy the last few years and are in a better fiscal position overall heading into 2024 as the operating environment has stabilized,” said Senior Director Seth Lehman.
How the broader economy evolves in the coming months, however, will be closely watched. “Stickiness in inflation driving higher operating costs and either weaker operating income or further pressures to pricing to end users, could drive a negative sector outlook,” said Lehman.
U.S. and Canadian airports have largely reached pre-pandemic passenger levels with added, albeit mild growth likely for next year. The same holds true for volumes at ports, which should see more stable operations following a couple of years of heightened volatility. The steady growth trajectory should continue undeterred for toll road projects in 2024.
Transportation public private partnerships (P3s) remain highly relevant for project delivery and risk sharing, though construction period risks remain a lingering area of concern. “Some projects with material delays in completion dates or taking on upward cost adjustments have resulted in challenges with grantors to resolve differences and could result in negative rating actions,” said Lehman.