Report: Closing investment gap would create jobs, spur economy

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In a new report released Wednesday by the Value of Water Campaign, an economic impact analysis examines how investments in the nation’s water infrastructure affect economic growth and employment. The report, “The Economic Benefits of Investing in Water Infrastructure” was shared for the first time as part of a World Water Day briefing on Capitol Hill.

Among the findings in the report, the analysis found that closing the investment gap in water infrastructure would create 1.3 million jobs, and stimulate $220 billion in economic activity. Contrary to addressing the funding gap, the report found that water infrastructure failure would mean big problems for businesses, as one day of water service disruption could cost 43.5 billion in lost sales and 22.5 billion lost in the GDP.

The analysis, conducted by Hatch, falls against a national backdrop of aging infrastructure. Many of the nation’s water and wastewater systems have operated for a century or more. As pipes, pumps, and plants reach the end of their expected lifespans, water infrastructure capital needs are growing rapidly. But, as the report noted, the federal government’s contribution to water infrastructure capital spending has fallen from 63 percent of total capital spending in 1977 to just nine percent of total capital spending in 2014.

The American Society of Civil Engineers (ASCE) recently estimated that over the next decade, the US needs to invest an additional $82 billion per year in water infrastructure at all levels of government, and all over the country. The Value of Water Campaign analysis released today showed capital needs distributed throughout the nation with 23 percent of needs reported in the Midwest, 20 percent in the Northeast, 23 percent in the West, and 34 percent in the South.

Key takeaways of the report:

  • Closing the water infrastructure investment gap would result in annual $220 billion in economic activity and result in 1.3 million jobs annually.
  • A one-day disruption in water service would cost $43.5 billion in sales and $22.5 billion in GDP.
  • An eight-day disruption would shrink the annual GDP by one percentage.
  • The federal government’s contribution to water infrastructure has fallen to nine percent, down from more than 60 percent 40 years ago.

“The report findings make it clear that investments in water infrastructure generate high quality jobs, increase the competitiveness of American businesses, and lead to a significant injection of economic activity throughout the nation,” said Radhika Fox, director of the Value of Water Campaign and CEO of the US Water Alliance.

“If we closed the gap between what the systems needs and what is currently spent, it would result in over $220 billion in total annual economic activity. That would result in 1.3 million jobs a year. That is the message we want public officials on Capitol Hill and across the country to hear: investing in water equals jobs. Investing in water infrastructure builds a prosperous America.”

The analysis found there was an upside to investment, as well as a severe economic cost to inaction. At a national level, a one-day disruption in water service represents an aggregate daily loss of $43.5 billion in sales and $22.5 billion in GDP. For context, an eight-day national disruption in water service would amount to a one percent loss in annual GDP – putting roughly 1.9 million jobs at risk.

For every day of water service disruption, the average US business loses $230 in sales per employee. In industries most reliant on water, sales drop by up to 75 percent, or up to $5,800 per employee.

Follow the Value of Water Campaign on Twitter and Facebook for highlights from the event and the report.

Read the full report here.

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