WEDNESDAY, MAY 15, 2024
A new report from the American Society of Civil Engineers has found that continued federal infrastructure investments will save jobs and grow the economy over the next decade.
“Bridging the Gap” analyzes two possible scenarios over 10- and 20-year timeframes. The first is referred to as the “Continuing to Act” scenario, where recent federal spending levels remaining in place; however, the “Snapback” scenario looks at when federal infrastructure investment returns to pre-Infrastructure Investment and Jobs Act levels after expiration in 2026.
“We failed to prioritize America’s infrastructure systems for decades, and those costs were passed down to businesses and consumers alike,” said Marsia Geldert-Murphey, ASCE President. “Federal action has made substantial progress stopping the growth of our needs, but this is just the beginning.
“We need continued action at the federal level and collaboration from state and local governments and the private sector if we are going to succeed in transforming our aging infrastructure network to be more sustainable, resilient, and best suit the future needs of American households and businesses.”
Report Findings
ASCE explains that infrastructure inefficiencies have consequences for businesses and consumers. The report finds that Continuing to Act greatly reduces infrastructure inefficiencies over time, leading to additional industrial output and household disposable income.
Alternatively, a Snapback will reportedly have a “cascading” effect on the economy, reducing disposable income for families, business productivity and overall GDP year after year.
The Bipartisan #InfrastructureLaw saves the average American household nearly $700 a year, according to ASCE’s new economic report.
— ASCE Headquarters (@ASCETweets) May 13, 2024
But without continued action, these savings won't last forever. Get a breakdown of the Bridging the Gap report’s key findings:… pic.twitter.com/GvdRmJscZh
In the Continuing to Act scenario, each U.S. household is losing $2,000 per year due to these inadequate systems, while the Snapback analysis predicts nearly $2,700 in individual household losses annually, meaning American families save nearly $700 annually when infrastructure is invested in.
However, ASCE notes that these are marked improvements from its last economic report, “Failure to Act,” which was issued prior to the bipartisan infrastructure law and estimated households lose $3,300 per year due to faulty infrastructure.
The report says that while American families and businesses benefit when the federal government continues to act, the federal government cannot solve this problem that was decades in the making alone. State and local governments, in addition to the private sector, must prioritize reportedly infrastructure to further reduce costs to households.
According to the study, major sectors like manufacturing, finance and real estate, health care, utilities, and agriculture are the most heavily impacted by infrastructure deficiencies. Manufacturers are also considered vulnerable because the production of goods requires reliable energy, clean water, modern transportation systems and dependable.
ASCE estimates that by 2033, the manufacturing sector would lose $1.15 trillion due to inefficient infrastructure in the Snapback scenario, compared to $877 billion in the Continuing to Act scenario, a difference of $276 billion.
Significant federal investments, including $550 billion over the five-year cycle of the IIJA, have reportedly stopped the investment gap from continuing to grow, but changes have raised baseline spending needs and prevent the investment gap from being noticeably reduced.
Examples of these changing circumstances include but are not limited to:
While the influx of federal investments have either reduced or maintained the investment gaps in the transportation, water, water transportation, and aviation sectors, policy changes and underinvestment in brick and mortar energy structures have reportedly caused the energy investment gap to skyrocket since 2020.
The society estimates that, between now and 2033, nearly $7.4 trillion is needed across 11 infrastructure areas: highways, bridges, rail, transit, drinking water, stormwater, wastewater, electricity, airports, seaports and inland waterways.
Under the Continuing to Act scenario, approximately $4.5 trillion in investment is anticipated to cover approximately 60% of total needs, leaving a gap of $2.9 trillion. Under the Snapback scenario, $3.7 trillion is anticipated, which covers less than 50% of total needs and leaves a gap of more than $3.7 trillion by 2033.
Further benefits to the American economy from Continuing to Act reportedly include:
“The ASCE report makes clear that big increases in public funding delivered under bipartisan infrastructure bills must continue. But that alone is not enough. Private investors see a huge opportunity to help State and city governments with the private finance and expertise they need to fix their problems,” said Jon Phillips, CEO, Global Infrastructure Investor Association (GIIA).
“These global investors have decades of experience of working with public sector partners to finance and manage high-quality infrastructure in countries like Canada, the U.K., mainland Europe and Australia. They now see the opportunity to help in the U.S. and are willing and ready to play their part.”
ASCE worked with a research team comprised of EBP, Downstream Strategies, Daymark Energy Advisors and the Interindustry Forecasting Project at the University of Maryland (INFORUM) to develop the study.
The full report can be downloaded here.
Tagged categories: American Society of Civil Engineers (ASCE); Economy; Funding; Government; Green Infrastructure; Infrastructure; Infrastructure; Port Infrastructure; Program/Project Management; Research
