Stuart’s two posts on traffic volumes in the last couple of weeks have highlighted the indisputable fact that we’re driving less, that we’ve been driving less for quite some time now and perhaps most interestingly, that us driving less is actually not a bad thing for the economy. The best data available is for state highway traffic volumes, where we can see three distinct phases of traffic growth/decline since 2008:
The data is from NZTA, and I have just overlaid the red lines and text separating out the phases. The key coloured line is the pink one, which shows the three month rolling average for all vehicles compared to the previous year. It tracks the green line, which is for light-vehicles, quite closely.
- Phase 1 is pretty much 2008, and starts with a dramatic decline in volumes in the earlier part of the year – with the rolling average for all vehicles in July bottoming out at around an 8% decline from the same months in 2007. In the later months of 2008 the decline reversed, but it took until 2009 before we saw ‘month on month’ positive growth rates re-emerge.
- Phase 2 is 2009 and is pretty much the only time when we actually saw higher traffic volumes compared to the same month the year before. However, a key reason for this is obviously because it was recovering from the massive declines in 2008. And in actual fact, many of the 2009 increases weren’t big enough to offset the 2008 declines. For example, traffic growth in June 2009 was 2.5%, but the decline in June 2008 had been 6.6%, meaning the 2009 numbers were still 4.3% below 2007 levels. Overall, only January and December 2009 had higher traffic volumes than the same months in 2007 – the rest were lower.
- Phase 3, which I think we’re still in, covers all of the last two years and is actually pretty boring really, showing pretty much no increase in volumes, although the decreases are not as dramatic as in 2008. After the huge fluctuations in 2008 and 2009 it has been a calmer period, but certainly has not reverted to the long-running trend of pretty constant growth in volumes that had occurred up until 2008.
Before I get onto the cause of these trends, I think it’s worth noting the differences between heavy vehicle trends and the general trend. Heavy vehicle volumes held up a bit better in 2008 (although the trend was downwards) than for general vehicles, but didn’t recover until much much later in 2009. In phase 3, heavy vehicle volumes have increased significantly more than general vehicles, although even they have tailed off in the last few months.
There are likely to be multiple causes for these trends. Stuart’s posts highlight changing demographics, changing cultural attitudes towards cars, technological change, transport saturation, ongoing urbanisation and rising transport prices as all contributing to this fundamental shift – which on a per capita basis has actually been quite a significant decline in the amount we’re driving. It’s hard to get good data on most of those contributing factors, except for one that I think has had perhaps the most immediate impact over the past few years: fuel prices. Using the handy AA Petrolwatch information, we can see how the price of 91 Octane fuel has fluctuated over the past four years (not adjusted for inflation by the way – something I probably should do for future posts): We all know the story: in the first half of 2008 oil prices spiked, sending petrol in New Zealand over $2 a litre for the first time. Then in September 2008 the global economy tanked and oil prices crashed – with petrol hitting a low of $1.33 a litre in December 2008. Prices held relatively steady (though generally increasing) throughout much of 2009 and 2010, before increasing in early 2011 (Libyan crisis?) and have stayed above $2 a litre ever since – most recently propped up by concerns over Iran and a slowly recovering global economy.
So what happens if we overlay the graphs on each other? Well, to further iron out some fluctuations in traffic volumes I have taken a 6 month rolling average, then overlaid that onto the graph above (though the horizontal lines relate to the volumes to make it clear where zero is): What seems to correspond best, just glancing at the graph above, is the relationship between petrol prices and the slope of the traffic volumes graph. I guess that’s natural when you use rolling averages, because it takes some time for the impact to really show through.
I’m not much of a statistical whizz, but overall there does seem to be quite a clear link between the two – showing that higher fuel prices really are a significant contributor (in my opinion) to declines in traffic volumes. With the likelihood of fuel prices increasing in the future seeming higher than the likelihood of them decreasing, it seems a fairly safe assumption that the stagnation in traffic volumes isn’t going to end any time soon: terrible news for NZTA and the Ministry of Transport who are trying to justify the spending of billions on new motorways, but great news for the rest of us as chances are congestion isn’t going to increase much in the future.