“Steady growth can be expected for the world rail market until 2017. Middle East, Latin America, Russia and CIS are among the particularly strong growing regions. Railway industry growth in these regions compensates for the slowdown of rail investments in China, where however there is now a new focus on urban rail”, shows the report World Rail Market Study launched by the Association of European Railway Industry (UNIFE) at the International Railway Technology Fair InnoTrans 2012, in Berlin.
The study also points to a positive outlook for the future. Spurred on by favourable conditions, the attractiveness of rail as a mode of transportation is continuing to gain ground.
As the global population grows, the trend towards urbanisation remains unbroken and metropolitan areas are becoming increasingly congested. All of which necessitates modern mass transit solutions – a segment that is predestined for rail transportation. The general need for mobility is likewise rising for both passenger and freight transportation. In addition efficiency and cost effectiveness issues are growing in importance as fossil fuels become scarcer – and hence more expensive – year after year. Accordingly, numerous current political and economic initiatives to encourage more resource-friendly transportation modes are favouring rail transportation as an efficient but also environmentally friendly option.
Since 2010 the global rail supply market has grown steadily. The total annual market volume averaged around EUR 146 Billion for the years 2009-2011, equivalent to a compound annual growth rate (CAGR) of 3.4 % compared to the average annual market volumes for 2007-2009.
Ever since publication of the 2010 UNIFE World Rail Market Study, the infrastructure and rolling stock segments experienced the strongest growth in absolute terms. Conversely, relative growth rates were strongest in the market volumes for integrated projects and rail control.
Despite the recent economic crisis, countries have added rolling stock and infrastructure kilometres to their installed base. This development has been observed in both the interurban and urban segments. Alongside significant growth in very high speed (VHS) trains, urban units too have experienced considerable growth. This development underscores the trend in larger cities and metropolitan areas to install new urban rail transportation systems and/or extend existing ones.
The rail supply industry has significantly outgrown the world economy, seeing its share of global GDP rise from 0.31 % in 2004 to 0.38 % in 2010.
Demand for passenger rail services was scarcely affected by the recent economic downturn. Accordingly, market volumes – driven by orders for new rolling stock and infrastructure and, subsequently, by orders for the servicing of these new assets – have suffered only in the freight segment, mainly in some parts of Europe. To take just one example: while GDP declined by more than 4 % during the financial and economic crisis in 2009, the passenger transport volume decreased by only 0.5 %. Rail transportation has thus proven to be an attractive alternative in times of economic uncertainty. At the same time, countries less affected by the economic downturn have seen rail transportation as the (literal) vehicle of choice to invest in and modernise their transportation infrastructures.
The world rail market remains stable despite the economic downturn, shows the same report.
“Our study registered stability in growth despite economic downturn in the past years. The world market has grown by 3.2% in each of the past three years – that is a remarkable achievement considering public funds are less available since the financial crisis which started in 2008”, said Philippe Citroën, UNIFE Director-General at the launch of the study.
The world rail supply market is still forecasted to grow by 2.7% each year over the next six years despite the slowdown in investment in the Chinese high-speed rail market, a key driver for growth in the past years. Currently, one of the key drivers for growth is the Gulf region with large projects such as the Doha Metro and light rail transit systems (both in Qatar), the new Mecca mass transit system and the Mecca-Medina very high-speed project.
Another growth hotspot is Latin America as a result of large orders coming from Brazil for rail freight and urban transport systems, and other large-scale orders coming from Argentina and Chile.
“Looking at the quality and quantity of existing and projected orders, the European rail industry is certain to retain a leading market position against other competitors. The increased demand for high-tech product in sectors such as rail control, for instance, gives reason to believe that the innovative head start of the European rail industry can certainly be retained over the next years”, concludes Philippe Citroën.
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