An input-output approach to analyse the significance of the transportation sector in Aotearoa's economy

Transportation is a central pillar of Aotearoa New Zealand’s economy, enabling the flow of inputs through supply chains and the delivery of final products to consumers. This study applies input – output analysis to evaluate the production-inducing effects, inter-industry linkages, sectoral supply shortages, and price impacts of four modes: road, rail, air and space, and other. The results show that air and space has the strongest backward linkages, reflecting its heavy reliance on upstream inputs and its capacity to generate substantial production gains when expanded. It is less sensitive to supply shortages and price fluctuations. By contrast, road, rail, and other modes display stronger forward linkages and are more vulnerable to supply shortages, as many industries depend directly on their services. These findings suggest differentiated policy priorities: investment or targeted subsidies in air and space could stimulate broad economic activity, while strengthening supply chains in other modes could reduce systemic risks.