Rock Products

AUG 2017

Rock Products is the aggregates industry's leading source for market analysis and technology solutions, delivering critical content focusing on aggregates-processing equipment; operational efficiencies; management best practices; comprehensive market

Issue link:

Contents of this Issue


Page 55 of 131

54 • ROCK products • August 2017 Aggregates Industry Almanac Economic Impact of the Industry N atural aggregates – including crushed stone and sand and gravel – are a basic raw material used for residen- tial, business and government construction projects, as well as in agriculture, and chemical and metallurgical processes. The aggregates industry – literally the foundation of our nation's infrastructure – is a significant contributor to the economic wellbeing of the United States, generating $27 bil- lion in annual sales and employing 100,000 mostly skilled workers. Impacts are felt throughout the broader economy. The industry supports $122 billion in national sales, $32 bil- lion in national earnings (i.e., wages), and between 364,000 and 600,000 jobs across a wide range of occupations and industries. Input-Output analysis reveals that each job in the aggre- gates industry supports an additional 4.87 jobs throughout the economy. These jobs are widely spread across industries and occupations. Each dollar of earnings (i.e., wages) creates another $4.19 of earnings in other sectors, and each dollar of sales in the industry produces another $3.47 of sales in other industries. The effect of the aggregates industry is both large and diverse. Sizable effects on employment and output are found also at the state and county levels. Production in the aggregates industry is closely linked to the construction and maintenance of residential, commercial and government buildings, as well as transportation infrastruc- ture including roads, highways, bridges and railroads. In recent years, the aggregates industry has experienced higher growth in response to increased construction in residential housing. Proposals to expand infrastructure spending to repair and expand the nation's crumbling infrastructure may portend even higher demand for the aggregates industry's outputs. As demonstrated here, the growth of the aggregates industry will positively and materially impact jobs, earnings and sales in many sectors of the nation's economy. America's infrastructure is in a state of inadequacy and decay. According to the American Society of Civil Engineers (ASCE), over the next 10 years (2016-2025) restoring the nation's surface transportation infrastructure – roads and bridges – requires an investment of approximately $2 trillion. 1 Under present funding targets, however, the government will spend less than half that, leaving an investment gap of $1.1 trillion. These direct costs grossly understate the magni- tude of the problem, as poor road conditions and inadequate infrastructure impose economics costs related to increased operating costs for vehicles, increased travel times from con- gestion, the breakdown of transit vehicles, the high costs of repairing excessively deteriorated infrastructure, and envi- ronmental damage from increased travel times and delays. Other infrastructure investment shortfalls include water and wastewater ($105 billion), electricity ($177 billion), aviation ($42 billion), and ports and inland waterways ($15 billion). Federal highway spending remains 23 percent below its 2002 level. 2 While there has been some effort to improve the transportation infrastructure, much of the investment targets maintenance rather than capital improvements and expansions. Consequently, some gains in road roughness have occurred, but total congestion hours in the nations' 50 largest cities has grown by 36 percent. 3 According to the ASCE, our nation's decaying transportation infrastructure costs businesses and households $147 billion annually, including $109 billion in vehicle operating costs, $36 billion in travel time delays, $1.4 billion in safety costs, and $0.7 billion in environmental costs. 4 As the population grows, these problems will only mount. The ASCE estimates these cost will rise to $238 billion by 2025. Rebuilding America's infrastructure has bipartisan support. During the 2016 election campaign, both Senators Hillary Clinton and Bernie Sanders proposed to spend hundreds of millions to update our infrastructure. 5 President Donald Trump also committed to rebuild America's infrastructure, at times calling for $1 trillion in investment over 10 years. 6 All of these proposals recognize that a key benefit of such infra- structure investments are not merely the physical facility but also the quality jobs required constructing them. Construc- tion, unlike modern manufacturing, remains a labor-intensive endeavor. How any new and significant infrastructure investment works its way through the economy and stimulates employment will be the focus of much attention. In light of the ASCE's estimate that the largest shortfall is in transportation infrastructure, it The Economic Impact of the Natural Aggregates Industry: A National, State and County Analysis By George S. Ford and Lawrence J. Spiwak

Articles in this issue

Links on this page

Archives of this issue

view archives of Rock Products - AUG 2017