Report: Transportation Construction Worth About $510B to US Economy

WASHINGTON, DC—As Congress prepares to debate a long-term highway financing bill later this month, a report by an industry trade group estimates the transportation construction industry's impact on the US economy is larger than the annual Gross Domestic Product of 160 nations.

The study, authored by the American Road & Transportation Builders Association's chief economist Dr. Alison Premo Black, finds the money invested in transportation construction industry employment and purchases generates almost $510 billion in annual U.S. economic activity—and accounts for 1.6% of the country's Gross Domestic Product. The construction transportation sector's contribution to the US economy is larger than the annual GDP of 160 nations ranked by the International Monetary Fund, including: Denmark ($361.3 billion); Israel ($321.2 billion); Ireland ($252.6 billion); and New Zealand ($211.4 billion).

The report, "The 2015 U.S. Transportation Construction Industry Profile" estimates the annual value of public and private transportation construction and maintenance work will be nearly $275 billion in 2015. It ranks larger than US industry sectors such as wireless communications carriers ($254 billion); food and beverage stores ($222.5 billion); insurance agencies and brokers ($219.5 billion); nursing care facilities ($171.1 billion); aircraft manufacturing ($158.3 billion); and automobile manufacturing ($131.4 billion), among others.

However, Black warns in the report that there are several major challenges that threaten the overall efficiency of the nation's transportation network -- starting with the uncertainty in Congress about the fate of the highway funding bill.

At the end of July, the Senate passed its version of the long-term surface transportation bill—the DRIVE Act—by a 65-34 vote. The House of Representatives is scheduled to debate its version of the legislation when it returns to Washington, DC later this month.

Without this measure, congestion will only worsen and put a damper on economic growth, the association says.  The US Department of Transportation has identified a backlog of $877 billion in highway and bridge construction projects across the country.

Another US DOT report noted that Americans drove just less than 3.09 trillion miles for the 12 months ending June 2015, which is above the 3.01 trillion miles during the same 12-month period in 2007-2008, before the Great Recession. The number of highway lane miles, though, grew 9% between 1980 and 2013, while vehicle miles traveled increased 96% over the same time period. The increase in traffic congestion and growth in vehicle miles traveled are clearly tied to the improving US economy and creation of new jobs," Black says. These same trends also underscore how important it is to have a national investment strategy in transportation, she continued.  "Congress must do its part this fall by completing action on a long-term highway and transit bill."