The transportation sector is an indicator of our economic health. This means that as the United States and others rebuilt, this sector’s exchange traded funds (ETFs) could have a nice boost in store.
Industries that make up the transportation sector include airlines, railways, package carriers, even oil and gas pipelines. Transportation is actually the most important sector we have, says David Fessler for Investment U. Why? Growth or contraction here serves as a proxy for both U.S. and global economic growth. (Why transportation is an “it” sector for the recovery). Transportation accounts for 3% of national GDP.
Warren Buffett seems to agree: the rail sector is one on which he’s bullish. (How to play what Buffett is buying).
The industry is highly correlated to consumers: as they buy more, there’s a need to transport more.