Methodology for the Freight Analysis Framework-2:
Forecasts of Inter-regional Commodity Flows

4. High and Low Growth Alternate Forecast Scenarios

The high and low growth alternate forecasts of the FAF2 data are based on alternative scenarios from Global Insight's U.S. macroeconomic forecasting model. The U.S. Macroeconomic forecast provides alternate scenario projections in addition to the preferred or baseline estimation. In this particular application to freight transportation volumes, sector-specific employment variables were utilized. These variables represent anticipated future employment levels based on U.S. Bureau of Labor Statistics data under high and low economic growth scenarios.. The high and low growth values for the specific variables used can be found in Section 5D of this report, with percentages of the baseline for each variable under the low and high growth scenarios for 2010 and 2035.

The alternate levels of forecasted employment captured in the high and low scenarios are projected based on more optimistic and pessimistic views of overall growth in the U.S. economy.

As an illustration of the variation between the base, high, and low growth scenarios in the employment factors, the total non-farm payroll employment levels in the final year of the forecast horizon, 2035, are 18% higher in the high growth scenario than in the base case. The low growth scenario is 15% lower than the base. Viewing these same numbers from the perspective of growth from the base year, in the base case forecast the total growth over the forecast horizon is 38%. In the high growth situation the overall increase is 62%, and in the low growth projection the rate is 17%.

For manufacturing employment, again projected to 2035, there is a 30% increase in the high growth forecast, versus the base, and a 20% decrease in the low growth projection compared to the base. Within the component industries of the manufacturing sector, employment in miscellaneous non-durable goods shows a 99% increase over the base case in the high growth situation, and a 47% decline in the low growth. Textile mill employment, conversely, only shows a 9% increase in the high growth scenario, and shows virtually no change in the low growth scenario.

The actual methodological application that creates the high and low growth forecast of the FAF2 flow data follows the steps outlined in Section 2 of this paper, as used for creating the base case forecast. This process was re-run with the appropriate input files changed to reflect the different levels of employment captured in the high and low scenario forecasts.

 

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