Driving the Economy

infrastructure-insight-header

A 180 to 200 percent return on investment (ROI) would be considered “good business” or a “good investment.”

Return on Investment blogOK, before you say, “I don’t know anything about ROIs, and I certainly don’t have any extra money to invest.” You – and more than 210 million people in the U.S. – are already making the investment and are a benefactor because of it. That’s according to a report by IHS Global, “Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of the Federal Highway and Mass Transit Program.”

Wait, wait, wait; don’t let the “ROI” and “macroeconomic contribution” confound you. You see, if you drive, you’re driving the economy. Each person who purchases motor fuel for their cars is making a contribution – or investment – into the federal transportation system.

For each gallon of motor fuel the U.S. driver purchases, an investment of 18.4 cents is made to the federal government’s highway, bridge and public transit infrastructure programs. While the average American driving 11,500 miles a year is paying less than $100 a year – that’s less than $2 a week – in federal gasoline tax, it adds up. Remember the last rush-hour traffic jam you were sitting in? There are a lot of drivers, or investors, on the nation’s roads, so the total investment equals around $50 billion a year.

Associated General Contractors of America CEO Stephen Sandherr said the IHS Global report “makes clear is that our entire economy benefits from federal investments in highway and transit projects.”

The ROI for drivers is not only a 46,000-mile, 610,000-bridge federal highway system – which allows us to commute to work, school and other activities that improve the American lifestyle – but much more according to IHS. The research shows that federal government’s investment in the nation’s highway system boosts the country’s job market and tax base – and thus the economy – provides additional pocket money for all, and much more:

  • Two out of every three jobs and more than 66 percent of economic benefits created by federal highway/transit investment occur outside the construction sector. Statistics show that roughly 112 construction jobs are created for every $5 million spent on transportation investment, so according to the IHS report nearly 225 jobs outside the industry are created – mostly in the areas of professional/business services, trade, transportation/utilities and education/health services.
  • Every $1 invested through the federal Highway Trust Fund (HTF) in state highway, bridge and public transit infrastructure programs returns 74 percent in tax revenue.
  • Every $1 investment in the federal HTF increases the nation’s Gross Domestic Product (GDP) by $1.80 to $2.
  • Federal transportation spending contributes on-average $410 of real income per household annually.

Not Investing has its Consequences
A failing transportation system has widespread consequences, as the country’s physical transportation infrastructure is a major driver of manufacturing competitiveness. A failing transportation system also affects the travel industry and the people and businesses involved in that sector. “When our 2-trillion-dollar travel sector isn’t functioning well, it costs us in tax revenue, jobs,” said U.S. Travel Association President/CEO Roger Dow. And when “the hassle of dealing with the highway system” causes travelers to stay home, this affects waiters, hotels and more. “It’s critical to invest in infrastructure,” Down says. “It isn’t just about roads, it’s about how America does business – and we’re all in this together.”

 

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