The Ministry of Transport’s Future Demand project explored the uncertainty of demand for personal travel by developing four future scenarios looking at the possible impact on travel. These are not predictions or preferences for the future transport system – rather a range of plausible futures that will help us make better investment decisions.


Led by Professor Glenn Lyons, University of the West of England, Bristol

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New Zealanders drive nearly 30 billion kilometres each year in their cars, vans, utes and SUVs. The road network also carries 70 percent of all of our freight . As a nation we have built and continue to maintain a network of roads to allow us to make these trips.

The road network is worth more than $60 billion and costs more than $1 billion a year to maintain. We are planning to invest $10 billion over the next ten years to change the shape of the network to improve its quality and capacity.

This would be relatively straightforward if we knew how demand would change. The challenge we face, however, is there have recently been changes to the patterns of demand for personal travel.
From 1980 to 2004 we saw annual increase in demand in the order of three percent per year. This highlighted the importance of tackling congestion and improving safety and gave us assurance revenue would grow to cover the costs of a growing network. From 2005 to 2013 total demand only grew by 0.25 percent per year.

We now face an uncertain future. We cannot be certain demand will return to pre-2005 levels of growth nor can we be certain it will remain flat. This means we can no longer rely on traditional forecasting models alone to help us to decide how to invest. Figure 2 illustrates how our traditional forecasting models have consistently overestimated demand.

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Figure 2: Historic New Zealand light vehicle traffic forecasts vs actual growth

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The aim of this project was to explore the uncertainty around demand for personal travel; car travel in particular which represents 77 percent of the total kilometres travelled on our roads. We did this by developing four future scenarios which explored the possible impact on travel of our use of digital technology and also the impact of energy costs on future travel demand.

These scenarios are shown in Figure 3. We also modelled the likely change in passenger vehicle kilometres travelled for each of these scenarios.

Future Demand scenarios infographic

Figure 3: Summaries of the four scenarios to 2042, with percentage change in passenger demand

The goal was not to create predictions of the future, nor was it to create a view on what our preferences were for the future transport system. Our goal was to produce a range of plausible futures. This would allow us to improve the likelihood that the investment decisions we make today will be right for the future.

This project is a complement to the Ministry’s project exploring Future Freight Demand which forecast freight demand would grow by 58 percent between now and 2042.

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The conclusions of our work were that:

When we think about creating a thriving New Zealand we should recognise we are trying to improve access not just mobility. There are three different ways we can achieve this: with good transport systems; with good spatial planning; or by improving digital access. We need to integrate our thinking across these three areas to achieve the optimal outcome.

To reduce the uncertainty we face we should seek to better understand the factors affecting the changing patterns of demand and refresh our demand models accordingly. We should look both at social trends and also speed in development, take-up and impact of new technologies.

To ensure resilience of the access system we develop for New Zealand we should seek to build in flexibility where we can. This will allow us to respond more quickly to changing patterns of demand and reduce the likelihood that we will make investments which will become unnecessary.

We need to recognise that the investment decisions we make will shape patterns of demand and not just respond to them. We should move away from the approach of seeking to simply predict future demand and then provide for it. We should instead debate the sort of access we want and decide how to invest to support the future.

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Changes to the Future Demand model

The Ministry has amended the Future Demand model, having considered peer reviewers’ comments about petrol price elasticity. A second version of the model uses a petrol price elasticity of -0.15. Please see the Modified Future Demand quantification model page for more details.

Users of the model and other Future Demand data should note the change in elasticity if comparing the results obtained from the original model to the modified model.

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Publications and research


Detailed papers

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These papers are presented not as policy, but with a view to inform and stimulate wider debate.


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