A new report from the Value of Water Campaign (VoW) examines how investment in U.S. water infrastructure could have a significant impact on GDP. The analysis explores both the risks of inaction and the economic benefits of closing the water infrastructure investment gap.
The report, Tapping Potential: The Economic Benefits of Investing in Water Infrastructure, is a first-of-its-kind impact assessment, developed by the Value of Water Campaign in partnership with engineering consultant Stantec and economic services company One Water Econ.
According to the report, every $1 million invested in water infrastructure generates $2.5 million in economic output, 10-plus jobs, $837,000 in labor income and $1.4 million in GDP. At 2025 funding levels, that translates to 2.2 million jobs, $307.9 billion in GDP, and $588.4 billion in economic output supported by water infrastructure.
Closing the Gap
On an average annual basis, closing the gap would mean an additional direct investment of $140 billion towards infrastructure and O&M spending. If this additional spending occurs, the investments could add more than 1.4 million jobs, $193.7 billion in GDP and $362.9 billion in economic output per year to the national economy. Closing the total investment gap over 20 years could support more than 1.4 million jobs each year, $3.9 trillion in total GDP, and $7.3 trillion in total economic output.
To estimate funding needs, the team analyzed recent data from EPA’s Infrastructure Needs Surveys and supplemented them with targeted estimates for lead service line replacement, stormwater upgrades, PFAS-related costs, and operations and maintenance expenses.
Economic Impact
To estimate the economic impacts associated with necessary water infrastructure investments, the team used an economic input-output model. The model was used to track how spending in one sector impacts others, generating direct, indirect, and induced effects, such as job creation, business activity, and household spending.
The VoW team said the study goes beyond a traditional economic impact assessment by also quantifying the cost of inaction.
Due to available data, the focus of the study is concentrated on pipes, treatment plants, pump stations, and other infrastructure that make up the nation’s drinking water, wastewater, and stormwater systems. The funding gap analysis does not include drinking water supply infrastructure, such as dams and levees.
The report also notes about the data: “It is important to note that when evaluating economic impacts of government spending, like those discussed in this report, the funds spent on water infrastructure would likely come from reductions in other government budgets, increases in tax revenues, or other sources. These would in turn have other potentially partially offsetting impacts.” The report notes that such decisions and trade offs are outside the scope of the VoW study, and the economic impact results presented should be understood as the “gross” impacts of investment in water infrastructure, not “net” impacts after accounting for other changes that may accompany investment.
Decrease in Federal Support
The report also notes that federal investment in water has fallen from covering half of all capital funding to just 7% today — leaving states, communities and ratepayers to bear the brunt.
Industry Reactions
“This report offers a roadmap for the nation: invest in water and reap enormous benefits for people, communities, and the economy. Delays only raise the risks and the costs. Now is the moment to unite for water,” said Mami Hara, CEO of the US Water Alliance, which administers the Value of Water Campaign.
“Clean water utilities are on the frontlines of protecting public health and the environment. This report affirms what we have long known — that closing the investment gap will not only safeguard clean water, but also strengthen the entire U.S. economy,” said Adam Krantz, CEO of the National Association of Clean Water Agencies.
“Metropolitan communities are the backbone of the U.S. economy, and they cannot thrive without modern, resilient water systems. This research underscores what our members experience every day: sustained investment is essential to protect public health and fuel economic growth—especially as water systems face challenges from emerging contaminants like PFAS, and strive to meet new regulatory mandates that require significant new resources,” said Tom Dobbins, CEO of the Association of Metropolitan Water Agencies (AMWA).
“Rural communities play a vital role in our economy but face some of the steepest per-capita water infrastructure needs in the nation. The stakes are high. With the right investment, we can ensure rural communities remain sustainable, protect public health, and create economic opportunity,” said Matt Holmes, CEO of the National Rural Water Association.
“This report shows that every dollar invested not only improves infrastructure but also creates good jobs, strengthens communities, and advances innovation in water management, supporting the $47 billion circular water economy and a resilient One Water future,” said Ralph Exton, CEO of the Water Environment Federation.
Click here to view an executive summary of the report, and here for the full report. Shareable resources including state- and topic-based fact sheets are available here.
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