Public-private partnerships are on the rise, creating a stable outlook for the nation’s infrastructure despite slow growth, according to Fitch Ratings’ 2014 transportation infrastructure outlook.
Needed infrastructure is being completed by these partnerships because of “uncertain” federal resources and the dearth of local and state money, Fitch’s Scott Zuchorski explained.
“While not a panacea for all funding issues, governments are increasingly looking to (public-private partnerships) for transportation projects where the economics make sense,” he said in a statement.” Two-thirds of states currently have (public-private partnership) enabling legislation in place, and given the size of future capital needs, Fitch expects transportation (partnerships) to continue to rise in 2014.”
For airports, Fitch expects a stable year for infrastructure, with an increase in traffic of between 1.5 percent to 2.5 percent and sound financing propping up that sector. The firm did note that while the merger between American Airlines and US Airways could impact services at some airports, it will take a while before the impact is seen.
Ports will also be stable next year, propped up by steady revenues and small increases in throughput, the firm wrote.
“Macroeconomic trends both in the U.S. and globally will affect throughputs and shifts in trade volumes, though contracts at the largest ports should insulate cashflows from volume volatility,” according to a Fitch press release. “Effects of shipping alliances on service frequency and cargo volumes, particularly the P3 alliance in 2014, continue to be monitored, as do expansionary capex programs at several ports. Fitch expects ongoing negative pressure on throughput as U.S. consumers continue to exercise caution.”