Whether by road, rail or air, the better the regional transportation connections, the greater the positive spin-off for local businesses and residents. Mobility helps trade to flourish. Economists long ago demonstrated the correlation between GDP growth and increased transport levels.

This relationship between growth and mobility works in both directions. A wider range of transport options encourages regional growth, and rising disposable income in a region leads to greater demand for transport. These twin variables are so interlocked that it can be hard to determine which came first. “Does air transport trigger regional economic growth, or is it that economic growth which attracts the air transport industry?” mused Montpellier Business School professor Paul Chiambaretto during a recent French senate hearing on the subject. “It’s a question that has been studied extensively and it seems that, in the large majority of cases, it is air transportation that generates economic growth by encouraging new businesses to set up and encouraging more people to move to the region.”

Transport demand is tied to global growth

The fortunes of the transportation industry fluctuate according to the state of the economy. Internationally, recent US-China trade tensions, uncertainties triggered by Brexit and the unsettled geopolitical situation in some parts of the world are all factors that can impact global GDP. According to the OECD, the weak global growth seen in 2019 (2.9%) is likely to extend into 2020 and 2021. “This would certainly attenuate growth in demand for transport, especially freight,” says the OECD.

A factor in resilience and recovery

Despite this, the OECD also predicts that global demand for mobility services will grow significantly in the years ahead. This applies particularly to countries whose economies are developing, such as Bangladesh, Senegal and Indonesia, or recovering, like Greece and Portugal, where strong economic and demographic growth will drive up demand for transportation services.

For countries that have lived through crises in recent years, developing quality mobility services is a way to increase resilience in a difficult environment as well as return to a thriving economy. The rapid growth seen in Portugal after three painful years of recession in 2008-2011 can be largely accounted for by growth in tourism made possible by the development of efficient air transport infrastructure.

Structural investments of this type enable countries to navigate tricky years with greater peace of mind. If the economy does falter in 2020, demand for transportation will likely follow a similar pattern. But the reverse is equally true: investment in transport infrastructure helps to mitigate weaker growth and paves the way to restoring and boosting economic growth.