UNP Union Pacific Corp

By Colin Kellaher

North American rail traffic fell 3.3% in the final week of June, as U.S. volumes continued to slow amid declining manufacturing output, data from the Association of American Railroads showed.

Carload volume for the week ended June 29 on 12 reporting U.S., Canadian and Mexican railroads fell 1.3%, while intermodal traffic fell 5.3%, the trade group said.

North American rail traffic was 4% lower in the week ended June 22. For the first 26 weeks of the year, North American volume is down 2%.

The AAR said U.S. rail traffic fell 5.5% last week on the heels of a 5.8% drop a week earlier. The volume of intermodal containers and trailers fell 7.4% for the week, while carloads slid 3.5% amid declines in eight of the 10 commodity groups tracked.

U.S. rail traffic fell 6.3% in June, marking the fifth straight monthly drop, as manufacturing output, which is responsible for much of the rail traffic base, continues to fall, the AAR said.

The Institute for Supply Management on Monday said its U.S. manufacturing index slipped to 51.7 in June from 52.1 in May, edging nearer to the 50 mark that separates expansion from contraction.

"Housing too is in the doldrums, and trade is suffering because of tensions with trading partners overseas," said John Gray, AAR senior vice president. "Taken together, demand for rail service just isn't as strong as it was six months or a year ago."

U.S. rail traffic is now down 3.1% for the year to date, compared with a cumulative decline of 2.9% at the end of the previous week, the AAR said.

"Obviously, railroads hope things turn around, both for their own sake and for the sake of the broader economy," Mr. Gray said.

The AAR said rail traffic rose 3.9% in Canada last week, with carloads up 5.2% and intermodal units up 2.2%.

Rail traffic edged down 0.4% in Mexico last week, as carloads slipped 0.1% and intermodal units fell 0.6%.

Write to Colin Kellaher at colin.kellaher@wsj.com

(END) Dow Jones Newswires

July 05, 2019 10:39 ET (14:39 GMT)

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