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TRANSPORTATION TRANSACTIONS <br /> Table 3 on page five contains highlights of modestly. Year-to-date, sales compared to <br /> annual rates of change in a number of the similar point in 2007 for Oregon are down <br /> <br /> transactions for the major transportation only about 1.3 On a moving, 12-month <br /> variables in the current forecast. A supporting cumulative basis (the equivalent of an "annual <br /> narrative of the Motor Fuels, Motor Carrier, run rate"), sales are down by only 0.2 to 0.6 <br /> and Driver and Motor Vehicles forecasts is of a percent, still only a modest diminution. <br /> <br /> provided below. Finally, from peak volumes in late 2006, <br /> usage is only off by about 1.1 percent for the <br /> 19-month span. <br /> All in all, the drop off is not quite as bad as <br /> Mofor Fuels Usage elsewhere and nationwide. For the nation as a <br /> whole, the reports indicate declines on the <br /> With the price of regular unleaded cracking order of 3 to 4 percent; or about 3 to 4 times <br /> <br /> the $4 per gallon barrier this past spring, we more dramatic as what we are seeing in <br /> have a good indication of the point at which Oregon so far into this business cycle. <br /> "demand destruction" in the market for <br /> <br /> trans ortation fuels2 occurs. Heretofore Several factors account for this contrast and <br /> p the relativel muted dro -offs in Ore on. <br /> gasoline and diesel fuel users seemed to y p g <br /> continually defy expectations for the point at <br /> which travel demand atterns would chan e First, while the price hikes have been sizeable <br /> . p g -and on an-inflation-ad'usted basis, at all <br /> measurably. It didn t materialize at $3 1n the ~ <br /> immediate after-effects of Hurricanes Katrina time highs - we can be sure that the decline in <br /> and Rita in 2005 nor Burin the drivin fuels demand is not entirely due to price <br /> ' g g sensitivit . <br /> season of 2006. By the summer of 2007, y <br /> <br /> prices persistently in the neighborhood of $3 Second the ace of economic activit in the <br /> and more seemed to have finall taken hold of p y <br /> y state is a far more potent driver for usage than <br /> drivers' attitudes somewhat. rice effects themselves within reasonable <br /> p <br /> This is rett much as we have maintained in limits of course. Two elements surface in this <br /> p y re and in so far as the rice elasticit is <br /> our past narratives: prices affect drivers g p y <br /> behavior with a la and moreover transitor concerned. The first is that job gains have <br /> g' y disa eared statewide be innin in the s rin <br /> <br /> price spikes have only a fleeting impact in pp g g p g <br /> alterin asoline and diesel fuel usa e. When quarter of 2008. Moreover, this is not <br /> g g g ex ected to be reversed until well into the <br /> <br /> the price hikes are perceived to be long p <br /> lastin drivers' shifts in reducin overall first half of 2009, at the soonest. Second, as <br /> g' g develo ed in more detail immediatel below, <br /> usage start to occur with more permanency. p y <br /> what may be occurring is that the gas price <br /> From almost an vanta e oint, the dro in pressures on the state's economy are affecting <br /> y g p p trans ortation fuel sales in a multifaceted <br /> <br /> the demand for transportation fuels is p <br /> unmistakable. For the first art of 2008, way. Drivers continue to make short-run <br /> p ad'ustments in their drivin and trans ortation <br /> motor fuels sales were lower, although only ~ g p <br /> mode habits, they start to make choices over <br /> 2 the fuel efficiency of their vehicle(s), and they <br /> And indeed, closer to $4.75 for diesel fuel. <br /> 6 <br /> <br />