Engineers Warn About the Economic Impact of Not Investing in Infrastructure
January 17, 2013
A lack of funding in infrastructure will mean more to the people of the United States than a few more potholes in the road.
According to the American Society of Civil Engineer's Failure to Act report, "The Impact of Current Infrastructure Investment on America's Economic Future," the U.S. government and its people will be feeling the lack of infrastructure funding in their wallets.
The report states that unless an additional $1.57 billion per year is invested in U.S. infrastructure, which includes everything from roadways, airways, waterways, electricity, and drinking and waste water facilities, the nation stands to lose a great deal of money.
By 2020, the ASCE projects that the U.S. stands to lose $3.1 trillion in gross domestic product and $1.1 trillion in trade.
"Overall, if the investment gap is not addressed throughout the nation's infrastructure sectors, by 2020, the economy is expected to lose almost $1 trillion in business sales, resulting in a loss of 3.5 million jobs," stated the report.
The report goes on to state that by 2020, the gap for needed infrastructure funding will reach $846 billion for surface transportation, $16 billion for inland waterways and marine ports, and $39 billion for airports. And by the year 2040, the funding gap for surface transportation is projected to grow to $3.66 trillion.
"In combination with current investment trends, cumulative infrastructure investment needs will be approximately $2.7 trillion by 2020 and will rise to $10 trillion by 2040. It is expected that funding will be available to cover only 60% (approximately $1.7 trillion) of these needs through 2020, and that will drop to 53% by 2040. Thus, the investment gaps will total $1.1 trillion by 2020, and will grow to $4.7 trillion by 2040," the report states.
As infrastructure deteriorates, the ASCE study states: "The previous studies in the Failure to Act series found that underinvesting in infrastructure will result in higher costs to businesses and households as a consequence of less efficient and more costly infrastructure services. For example, travel times will lengthen with inefficient roadways...Goods will be more expensive to produce and more expensive to transport to retail shelves for households or to business customers."
As goods and the cost to move them increases, GDP will decrease, and the ASCE predicts that there will be cuts to employment, which will result in an average loss of more than $3,000 per year for every U.S. household through 2020.