Falling demand for consumer goods, building materials and cars has led to an 8.6 per cent drop in the volume of freight moved on the rail network in the first quarter of 2009 compared with same period last year.

The decline has doubled since the previous quarter to Christmas last year, according to the Office of Rail Regulation, the industry's spending watchdog.

Freight is often considered a bellwether industry, as demand rises and falls according to wider spending patterns in the economy. Shipping, road and air cargo traffic have also been hit by the collapse in the international goods trade and manufacturers cutting back on components.

The biggest fallers were metals, including steel, which declined 50 per cent to 240m net tonnes; international container goods, down 16.3 per cent; and construction, down 13.6 per cent. However, coal freight increased by 8.6 per cent on a like-for-like basis.

Analysts said the figures suggested green shoots had yet to take hold. "It's not a good sign," said Douglas McNeill of Astaire Securities. "It suggests no improvement in international trade flows."

The decline in train cargo volumes could undermine government attempts to shift haulage from the roads to rail to ease congestion and reduce carbon dioxide emissions. Rail accounts for 12 per cent of UK freight, and Network Rail, the not-for-profit infrastructure owner, said this could more than double by 2030. In April it slashed track access charges by 35 per cent in an attempt to increase take-up.

But the price cuts may have come too late, according to John-Manners-Bell, analyst at Transport Intelligence, a consultancy. Road hauliers have taken market share from rail during the past six months because they have fewer fixed costs and are better placed to compete on price.

Lorry drivers' core business of delivering to local British markets has proved more resilient than the import-dependent rail freight market. While retailers have been exhausting existing supplies rather than ordering new goods from Asia, consumers are still buying, albeit at a slower rate.

This means the next quarter will be crucial, according to Mr Manners-Bell.

Four operators have dominated the market since privatisation in the 1990s - Freightliner, Direct Rail Services, First GB Railfreight and DB Schenker. All have parked up wagons or cut jobs.

Tony Berkeley, chairman of the Rail Freight Group, said prices were being squeezed. "It's a service industry; it relies on what customers want and the market will go where the downturn goes," he said.

"Still, no one has gone out of business, yet. They are waiting for the upturn."