RDI Remains Firmly in Expansion Territory, Supported by Manufacturing Momentum

Research evidence excerpt

RDI Remains Firmly in Expansion Territory, Supported by Manufacturing Momentum

May 19, 2026

Freight Monitor Weekly

Transportation

RDI Remains Firmly in Expansion Territory, Supported

by Manufacturing Momentum Fadi Chamoun, CFA Analyst

fadi.chamoun@bmo.com (416) 359-6775

April RDI of 89 remains firmly in expansion territory; indicators suggest a recovery in

Fred Kornachev Senior Associate

merchandise volumes is on the horizon. Recall, our BMO Rail Demand Index (RDI) has

fred.kornachev@bmo.com (437) 335-0049

proven to be a strong leading demand indicator for rail carloads (historically leading

carload demand by 3-6 months), with 19 underlying variables strongly correlated to Amanda Abraham, CFA Senior Associate

various segments of freight transported by rail (Exhibit 1). A reading above 50 indicates amanda.abraham@bmo.com (416) 816-9139

accelerating demand momentum, while a reading below 50 suggests decelerating

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demand momentum.

Through 2026, we have observed sustained strength in our RDI, with a preliminary April

reading of 89 marking the fourth consecutive month in expansion territory (March reading Week 19 ended May 16, 2026

of 95, February 74, and January 58). The YTD improvements in our RDI reflects broad- Carloads*

based strength across leading manufacturing indicators (namely ISM/PMI, which inflected Week 4WMA QTD YTD

positively in 2026), leaner manufacturing inventory levels (supportive of restocking y/y % y/y% y/y % y/y%

activity), recovering auto production following the late-2025 chip shortage, and increasing Coal -11.7% -7.5% -5.0% 0.8%

home building activity (reflecting a tight demand market despite elevated rates and Agriculture 11.7% 7.9% 8.1% 8.3%

affordability issues).