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Abstract
This paper predicted fluctuations in the transportation sector using leading indicators. From 25 initial
candidates, we selected seven leading indicators, using various screening techniques and modern time
series models. A composite leading index was constructed and found to perform well in predicting
transportation reference cycles. The leading index signals downturns in the transportation sector
10 months ahead and upturns six months ahead on average. The index predicted the latest recession
in transportation with a lead of 20 months. The analysis also confi rms the predictive contents of the
composite leading index (CLI) in relation to transportation growth cycles. These evaluation criteria
ensure accurate forecasts of the general state of the transportation sector in a timely fashion.