by: Chris Dier-Scalise, Benzinga Staff Writer
American infrastructure has earned another D average grade from the American Society of Civil Engineers, according to the group's latest report card, published every four years. The 2017 report card, released Thursday, marks the sixth consecutive time the country has received a D average from the body.
In tandem with the report card, the ASCE also highlighted their 2016 Failure to Act Report, a series started in 2011 which estimates the projected cost and impact upon American households, businesses, and the overall economy in failing to update the nation's various infrastructure systems.
The sectors outlined in the report include surface transportation, water and wastewater, electricity, aviation, and ports and inland waterways. Given the ASCE's persistent sub-par evalutions of the systems, the forecasts presented in the Failure to Act Report are, to put it mildly, bleak.
GDP Is In Trouble
Overall, the report estimates that the country's GDP stands to lose nearly $4 trillion between 2016 and 2025, a figure that more than quadruples by 2040 to over $18 trillion, more than the country has ever generated in any single year. Annually, that adds up to an average loss of $365 billion in the next nine years and $947 billion in the following two decades.
The outlook is similarly grim for businesses, which according to the report stand to lose out of over $7 trillion dollars in sales by 2025 and over $29 trillion by 2040.
The report estimates that more than 31 percent of these business losses up to 2025 will be incurred due to failures in the country's roadways, but it makes clear that costs will rise across the board, increasing the expense of energy as well as the price of importing and exporting goods.
We'll Also Have Job Losses
The report also highlights how these losses will negatively impact the availability of high-paying jobs by hampering business development and requiring more labor to fix the issues presented by the aging infrastructure. The ASCE puts the amount of potential job losses at 2.5 million by 2025 more than 5.8 million by 2040. All of which will have a sizable impact on households, which the report suggests will average a loss of nearly $34,000 by 2025 and $110,000 by 2040 due in part to lower wages and the increased cost of consumer goods.
Possibly the most immediately damning aspect of the Failure to Act report is the projected gap in funding for the country's infrastructure, which shows how much additional money will be required for upkeep if the systems are not updated.
The report projects the cumulative gap between the funds needed for infrastructure and the funds that actually get allocated will rise to $1.4 trillion by 2025 and $5.1 trillion by 2040. But even those figures have grown since they were first projected in 2011-12. The revised numbers added 140 billion to the 2025 estimate and 220 billion to the 2040.
Feeling Blue? Here's A Highlight
While the report may seem just shy of apocalyptic, the ASCE did highlight a few minor bright spots, including the increased role of state governments in patching up roads and freeways as well as the commendable maintenance of the nation's waterways, marine ports, electricity infrastructure, airports, and wastewater infrastructure.
For optimists, the Failure to Act report does have one final potential bright spot: that closing the infrastructure funding gap is feasible, for now.
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