- In a recent interview with CNBC's "Trading Nation," Deutsche Bank's chief international economist Torsten Slok said that freight rail waste volumes are a direct indicator of how well the economy is doing.
- Slok pointed out that an increase in garbage transport suggests that GDP recovery "continues, or that the economic expansion is moving forward."
- CNBC reports that Bloomberg economist Michael McDonough also follows garbage transport volumes as a way to indicate economic growth.
Slok indicated that when oil prices fell and the dollar went up, "a lot of economic statistics were distorted and you did see a slowdown in a lot of places. ... This indicator is an attempt to get a more pure view of where the business cycle is at the moment." However, this indicator cannot be applied for all areas of "growth."
While Slok is correct that there has been an slow upturn in economic expansion, this correlation does not necessarily mean that garbage volumes have a directly positive correlation on the economics of the waste industry. An increase in waste volumes may indicate a decrease in recycling for some areas of the nation, which points to low commodity prices and overall business struggles. While commodity prices have seen an uptick in the recent quarter, as reported by both Waste Management and Republic Services, it is too soon to declare victory and feel dependent on the current state of recycling.
Additionally, many industry leaders have pointed to the long-term economic benefits of "closing the loop" and making efforts to wipe out waste volumes altogether. While the linear model has provided a wealth of manufacturing opportunities to boost the GDP, that economic system will not be viable for much longer as environmental consequences of such systems begin to take a toll.