Key Findings: 2012-2013 INRIX Traffic Scorecard Annual Report

Introduction

Death, taxes and traffic are often called the three certainties of life. At social gatherings, traffic and its impact to our lives is a common topic. “Traffic is bad and it’s getting worse” one might say. “If it gets any worse, I am going to…” another might say. Until recently, traffic and its horrors has been a largely anecdotal discussion. “If you think your commute is bad, you should try to get from ( ) to ( ) at 8am; I bet it’s the worst commute in town.”

How bad is traffic? Where are the worst places and the worst times to drive? London or Manchester? New York or L.A.? On the M25 or the M6? Monday morning or Friday evening? How does UK traffic compare to France or Germany? How does traffic in Europe compare with the U.S.? With increasing amounts of data and cutting edge analytics techniques, we now have the data and tools required to adequately analyze and address these issues.

Drawing on more than six years of trend data, this 2012 Annual Report documents that traffic congestion across Europe dropped 18 percent and North America dropped 22 percent last year compared to 2011. Of the 15 countries analysed in the 2012 report, Portugal experienced the biggest decline (-50%), Spain (-38%) and Italy (-34%) – interestingly these are the same countries that continue to struggle the most through the European debt crisis mirror those with the largest drops in traffic congestion. Despite being considered the strongest European economies, troubles across the Eurozone fueled declines in Germany (-15%), Netherlands (-15%) and France (-10%). Luxembourg was the only country to experience an increase in traffic congestion in 2012 at 29%. No surprise given that Luxembourg has the best per capita income with the highest gross domestic product per capita in the world. Although it’s a small economy, it’s GDP of $55.9 billion equates to a GDP of $106,958 per person.

Analysis of traffic congestion in the first 3 months of 2013 shows some signs for optimism – particularly in the U.S. and Ireland. Among all 15 countries analyzed worldwide, only three (Luxembourg, Ireland and the U.S.) have experienced increases in 2013. Traffic congestion in the first three months of 2013 is up 4%, Ireland is up 10% and Luxembourg is up 38% combined with a declines and unemployment and a return of consumer spending. By contrast, Eurozone countries continue to experience even greater declines in the first 3 months of the year with Portugal (-68%), Spain (-57%), Italy (-33%), Germany (-23%), France(-6%), U.K Z(-11%) and Netherlands (-26%). Only France appears to be bucking the trend with traffic congestion down just 6% in comparison to the 10% decline in 2012.

In the U.S., a stop and go economy resulting from consumers and employers taking a “wait and see” approach through numerous tax and fiscal deadlines in 2012 stalled the economy and any rises in traffic congestion. By contrast, resolution to payroll tax extension and the temporary budget fix from the sequester helped create enough certainty in the first quarter of 2013 for employers to resume hiring (up 1.3%) and consumers to spending (consumer confidence is at its highest rate in 2+ years) While fuel prices have remained relatively stable in 2013, high unemployment and the debt crisis have been the primary drivers of Europe’s declines.

In summary, the data paints a picture of a “Stop n Go Economy” worldwide where shifts in traffic congestion are indicative of shifts in the broader economic health of the countries and cities examined in the report.

Since its groundbreaking first publication in 2007, the INRIX Traffic Scorecard Annual Report has analyzed and compared the status of traffic congestion throughout the top 100 metropolitan markets in the U.S. and the nation as a whole. In 2010, INRIX also introduced the Scorecard for major countries throughout Europe. Reviewed by regional departments of transportation, academics, media, city planners, economists and everyday drivers, the INRIX Traffic Scorecard has become a trusted benchmark for understanding traffic congestion and an indicator of the health of our local economies.

Drawing on six years of trend data, the 2012-2013 Annual Report shows that traffic congestion is up 4 percent already in 2013 compared to 2012. After cuts in government spending during the final months of 2012 brought the economic recovery to a virtual halt, economic sentiment improved during the first three months of 2013 and data indicates that traffic congestion is once again on the rise as a result. This suggests that after a tumultuous economic year in 2012, the economy may be back on the mend for good, and with that bringing increased traffic congestion.


Key 2012-2013 Scorecard Findings




Methodology



Initial INRIX 2007 Traffic Scorecard Annual Report was transformative in its ability to illustrate how “Big Data” crowd-sourced in real-time from actual vehicles and mobile devices traveling our road networks could be archived and analyzed to provide a comprehensive, consistent and timely measure of traffic congestion nationwide. The 2008 Annual Report documented the dramatic 30%+ plunge in congestion from 2007 caused by 2008’s skyrocketing fuel prices, high unemployment and sharp reductions in consumer spending during the recession – validating traffic’s value as an economic indicator. The 2009 and 2010 Annual Reports showed that the drop in congestion had ended and appeared to “reset” to 2004/2005 levels, prompting INRIX data analysts to predict that future traffic patterns will be heavily influenced by the rate and pace of economic recovery. In 2011, this prediction proved true as traffic congestion decreased 24% as a result of a sluggish economy.


U.S. Economic Factors Affecting Traffic Congestion



Despite economic ups and downs throughout 2012, INRIX reports that congestion back on the rise in 2013 – congestion in January through March 2013 is already 4 percent higher than the same time period in 2012, indicating that after 2012’s rollercoaster, the economy may be on the road to recovery for good.

However, with congestion continuing to decline last year, the Scorecard found the nation’s INRIX Index for 2012 decreased 22 percent from 8.4 in 2011 to 6.6 in 2012. Traffic congestion remained relatively consistent throughout the year, with a peak congestion level (INRIX Index) of 7.1 in both September and October, following a low of 5.9 in July. In this section of the Annual Report, we look closely at national employment levels, urban interstate traffic volumes and U.S. gas prices to determine their effect on traffic congestion. The tables below show year-to-year changes in several key statistics, each based on data from the appropriate federal agency.


Fuel Prices

Fuel prices in 2012 experienced several peaks and valleys, with a high reached in April ($3.90 per gallon average) and a low hit in December ($3.31 per gallon average). Prices were consistently higher during the first four months of 2012 than in 2011. In May, the trend reversed and prices throughout the late spring/early summer (May-July) were lower than 2011 levels. In August, 2012 prices once again outpaced the previous year, and this continued throughout the remainder of the year. Overall, the average gallon rose $0.10 from $3.52 in 2011 to $3.62 in 2012, a nearly three percent increase. In 2013, fuel prices have risen nearly 12 percent from January through March. However, the average cost per gallon in 2013 is still lower than in 2012.
Fuel Prices in 2011, 2012 & 2013 (to date)
(U.S. Regular, All Formations)



Source: U.S. Energy Information Administration
Traffic Volumes

Travel on roadways classified as “Urban Interstates” by the Federal Highway Administration (the roads that most closely align with the roads analyzed in the Scorecard) declined 1.2% in 2012. This decrease, similar to the level of decline from 2010-2011, is likely due to less Americans driving overall either because they are out of work, stopped looking for a job or just trying to spend less on gas in a tight economy. Already in 2013, overall traffic volumes are up compared to the same period in 2012 (January through March).
Annual Vehicle Miles Traveled, Urban Interstates
(in billions)


Source: U.S Department of Transportation Federal Highway Administration
Jobs

Total employment in the U.S. increased by nearly 2.3 million jobs in 2012, a nearly two percent increase over 2011 (up from a 1 percent increase from 2010-2011). Still, from its 2007 peak, America is down nearly 4 million jobs nationwide at the conclusion of 2012. So far in 2013, employment has increased by 1.3 percent.
Annual Average U.S. Non-Farm Employment
(millions employed)


Source: United States Department of Labor


National Congestion Results and Economic Trends



2013 Highlights
2012 Highlights

Global Congestion Results and Economic Trends



As in the U.S., traffic congestion is also closely tied with economic trends in Europe.

Country
Hours wasted in traffic in 2012
% Change 2012 from 2011
Change in hours
% Change Q1 2012 - Q1 2013
Unemployment Rate4
Belgium
59
-12%
-8
-1%
7.4%
Netherlands
52
-15%
-9
-26%
5.8%
Germany
37
-14%
-6
-23%
10.5%
France
37
-12%
-5
-6%
5.4%
UK
29
-19%
-7
-11%
7.9%
Luxembourg
29
+29%
+6
+38%
5.1%
Austria
25
-19%
-6
-39%
4.5%
Spain
25
-38%
-15
-57%
26.6%
Switzerland
23
-11%
-3
0%
3.2%
Italy
22
-34%
-11
-33%
11.1%
Ireland
19
-9%
-2
+10%
14.7%
Hungary
15
-24%
-5
-74%
10.9%
Portugal
11
-21%
-11
-68%
16.3%

Conclusions



So what does this year’s Scorecard tell us?


1United States Department of Labor
2United States Department of Labor
3State of California Employment Development Department
4Results from Eurostat