Rock Products

AUG 2017

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60 • ROCK products • August 2017 Aggregates Industry Almanac Economic Impact of the Industry Total GRP from the quarry industry in 2016 was almost $15 billion. National Impact of the Aggregates Industry We now turn to estimates of how the aggregates industry contributes to the economy more broadly. In Table 6, the jobs, earnings, and sales multipliers are provided and each is broken into its component parts. These multipliers cap- ture the broadest economic impacts by including government impacts. The aggregates industry – a key input into the con- struction industry and concrete – is a significant supply chain contributor. Consequently, the industry has high multipliers. As shown in the table, the quarry industry does not have high direct and indirect multipliers. Due in part to the higher than average earnings per worker (and thus more disposable income), the induced multipliers are very high. Using the multipliers from Table 6, we can extrapolate the effect of the aggregates industry to the national economy. Table 7 summarizes the aggregates industry's impact on the national economy. The jobs impact is calculated in two ways. First, we apply the multiplier to the 61,042 jobs in the quarry component of the broader aggregates industry. Second, we apply the multiplier to the entire employment base of the aggregates industry estimated by the USGS to be 102,000, which assumes that the multiplier from the quarry industry is equal to the non-quarry jobs in the aggregates industry. The aggregates industry exerts a sizable influence on the U.S. economy. In addition to the direct employment in the quarry industry, the economic activity of the industry is associated with an additional 297,275 jobs for a total employment effect of 358,317 jobs. Extending the analysis to the employment of entire aggregates industry, the industry's economic con- tribution is nearly 600,000 jobs. 27 The industry's $6.1 billion in earnings (payments to labor and proprietors) ripples through the economy to create an additional $25.6 billion in earnings, for a total of nearly $32 billion in earnings. Includ- ing multiplier effects, the aggregate industry's $27 billion in sales drives nearly $122 billion in total sales through the economy. As multipliers are derived from statistical models, it is sensi- ble to include a range of estimates. We present in Table 8 more conservative estimates of the multipliers. In constructing these estimates, both indirect and induced effects are retained, but government impacts are excluded, recognizing that such effects may by policy based rather than economically driven. The dif- ferences in the multipliers are limited to the induced component of the multiplier. The multipliers remain large. The aggregates industry drives between 275,000 and 459,000 jobs and nearly $78 billion of economic activity for the American economy. Even these conservative estimates are quite large.

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