A study just released by the American Society of Civil Engineers (ASCE) amounts to a stinging indictment both of the crumbling infrastructure of the U.S. and even more so, the public and private funding that is woefully inadequate for currently needed repairs let alone expansion to meet future needs.
According to ASCE, its "Failure to Act: The Impact of Current Infrastructure Investment on America’s Economic Future.” report shows that “improving the condition of our nation’s aging roads, bridges, power lines, sewer systems, ports and waterways is critical to protecting 3.5-million jobs… Between now and 2020, investment needs across key infrastructure sectors total $2.75 trillion, while planned expenditures are about $1.66 trillion, leaving a total investment gap of $1.1 trillion.”
"The results show that deteriorating infrastructure, long known to be a public safety issue, has a cascading impact on the nation's economy, negatively affecting business productivity, gross domestic product, employment, personal income and international competitiveness," stated the report.
“The report pretty much says what we've known for a while-- that we are spending roughly half what we need to on surface infrastructure, and relatively modest investments today can produce significant economic benefits in the long run or, as they put it, avoid economic deterioration,” Sean McNally, American Trucking Assns. spokesman told FleetOwner.
“The report calls into question the shortsightedness of those who purport to protect Americans from higher costs by refusing to raise gas taxes,” McNally added. “In fact, they are actually choosing to take more money out of their pockets.”
ASCE noted that Failure to Act is the culminating report in a five-part series and aimed to analyze the “interactive effect between investment gaps in the infrastructure sectors” addressed in each of the preceding four studies. As such, it “presents an overall picture of the economic opportunity associated with infrastructure investment and the cost of failing to fill the investment gap.”
The Failure to Act studies compare current and projected needs for infrastructure investment against current funding trends in surface transportation (highways, bridges, rail, transit); water and wastewater; electricity; and airport and waterborne transportation.
“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,” stated the report. “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.”
ASCE said that with an additional investment of $157 billion a year between now and 2020, the U.S. “can eliminate this drag on economic growth and protect”:
- $3.1 trillion in GDP, which is more than the 2011 GDP of France
- $1.1 trillion in U.S. trade value, which is equivalent to Mexico’s GDP
- 3.5 million jobs, which would be more than the jobs created in the U.S. over the previous 22 months
- $2.4 trillion in consumer spending, which is comparable to Brazil’s GDP
- $3,100 in annual household income
The study found the biggest funding gap-- $877 billion— to be for highway and other surface transportation projects determined to be needed by 2020. Highway funding depends on the federal fuel tax, which has not been raised in 20 years. Moreover, it is being seen as an inadequate means to increase revenue as the fuel efficiency of cars and light trucks keeps climbing.
“Infrastructure is the lifeblood of our economy and provides the foundation for assuring a high quality of life for all Americans,” said Gregory E. DiLoreto, president of ASCE. “Our culminating Failure to Act report shows that deteriorating infrastructure has a cascading impact on our nation’s economy, yet we have a real opportunity to make crucial investments in America’s infrastructure that will pay off in huge economic dividends.”
"Public and private investment and new, innovative strategies are needed to repair, rebuild and revitalize the nation's transportation system," Janet Kavinoky, executive director of transportation and infrastructure for the U.S. Chamber of Commerce, said in a statement on the study.
ASCE noted that this final Failure to Act report “serves as a preface to ‘The Report Card for America’s Infrastructure,’ which the group will release in March.
Released every four years, the Report Card grades the current state of national infrastructure categories on a scale of A through F. The Failure to Act report examined nine of the 16 infrastructure systems that will be addressed in the 2013 Report Card.
ASCE’s 2009 Report Card gave the nation’s infrastructure a grade of “D” and estimated the five-year infrastructure investment need of the U.S. to be $2.2 trillion.
The full Failure to Act report, including infographics depicting data trends, can be found at www.asce.org/failuretoact. ASCE stated that report’s projections “assume needs and available funding based on current trends, and do not adjust for possible costs associated with climate change, changes in regulations or other factors.”
Failure to Act was prepared by the Boston-based Economic Development Research Group, a consulting and analytics firm.
Click on ‘Handle’ to follow David Cullen on Twitter: