Discuss the problems of forecasting future trends in transport market (20).
Discuss the problems of forecasting future trends in transport market (20).
Forecasting is estimating what the future demand for transport will be. Usually economics predict 3 variants of forecast: low, high and average. This is because there are a lot of uncertainties because some assumptions of forecast are based on a wide range of data. The forecast can be based on GDP figures, imports figures and past trends,etc.
They look at those figures because the government or certain companies need to plan future spending decisions or to set new transport policy. Also, people use forecasts because they want to help transport planners meet future needs. However, there are a lot of problems which are caused by looking at these datas.
The main problem with GDP is that we always have recessions and recoveries throughout the period. However, if we forecast mainly on these figures, the chances that we will be wrong are really high. For example, in 2008 no one expected to have crisis and a lot of transport projects were rejected to be brought in reality as economics estimated that there will be a huge increase in GDP and the economy would flourish, as a result they were wrong and current needs did not meet transport planners’ plans.