The importance of President Obama’s Labor Day call for congressional action soon on a front-loaded, six-year reauthorization of the federal highway and transit improvement programs is underscored by new research that shows the programs’ importance to the U.S. economy.
The report, “The U.S. Transportation Construction Industry Profile,” says money invested this year in transportation construction industry employment and purchases will generate over $380 billion in U.S. economic activity—nearly 3% of the nation’s Gross Domestic Product (GDP). That’s larger than the annual GDP of 160 nations ranked by the International Monetary Fund, including oil-rich Saudi Arabia ($370 billion) and Kuwait ($111 billion).
The report, released by the Transportation Development Foundation of the American Road & Transportation Builders Association (ARTBA), shows the annual value of domestic transportation construction will surpass $120 billion this year. This ranks it larger than industry sectors like auto repair and maintenance ($116.8 billion), farming ($97.5 billion) and coal mining ($29.8 billion), to name a few.
Alison Premo Black, ARTBA senior economist and the report’s author, found transportation construction supports 3.4 million American jobs—1.7 million directly involved in construction and related activities and 1.7 million jobs sustained by transportation construction industry employee, firm and agency spending throughout the U.S. economy.
She cautioned that thousands of these jobs could be in jeopardy if Congress fails to take action soon on a multiyear surface transportation program investment bill.
Utilizing U.S. Census Bureau “County Business Patterns” data and the U.S. Commerce Department’s Regional Input?Output Modeling System (RIMS II), Premo Black found the transportation construction industry’s largest economic impact is in the state of California, where it generates or sustains more than 354,000 jobs. California’s followed by New York (286,449), Texas (276,276), Florida (196,087), Pennsylvania (148,669), Illinois (129,014), Georgia (106,658), Ohio (104,310), Washington (100,384) and New Jersey (97,036).
Black says transportation construction activity generates $159.3 billion annually in direct and induced U.S. wages. These workers, she says, will contribute an estimated $13.1 billion in federal and state payroll taxes this year. But that is not the end of the story.
“What is often overlooked is that the work the transportation construction industry performs results in the nation’s longest-lived capital assets,” Black points out. “And transportation infrastructure makes all kinds of other economic activity possible.”