U of U Study Projects $14.4 Billion in Transportation Construction to Create Jobs

Dec. 15, 2004 — According to a new report, prepared by the Bureau of Economic and Business Research (BEBR), in the University of Utah’s David S. Eccles School of Business, $14.4 billion (constant 2004 dollars) in Utah transportation infrastructure investments planned for the next 26 years, will significantly influence the region’s land use patterns, relative competitiveness and economic development potential, resulting in thousands of new, well-paying construction jobs for Utahns.


Sponsored by the Utah Transit Authority, the study, “Economic and Demographic Impacts of Federally Financed Transportation Infrastructure on the Wasatch Front,” reports that highway, arterial, heavy rail and light rail projects along the Wasatch Front-which include a commuter rail from Weber County to Utah County and new highways like the Legacy Parkway and the Mountain View Corridor-will result in a permanent, specialized, transportation labor force. “Having a variety of transportation experts in the state will be a huge engine for economic growth-and these won’t just be temporary laborers. These will be established residents, whose professional expertise and goods and services could be exported to other regions, bringing even more money back into the state. This is good news for a state that struggles with wages,” notes Pam Perlich, the BEBR senior research economist who prepared the report.


In 2002, Utahns’ average gross monthly wage was $2,510 as compared to the average gross monthly wage of a heavy construction worker, which was $3,467.


Federal dollars financing these projects will result in an average of 2,800 additional jobs each year. This incremental employment will support about 3,900 more people for the duration of the projects. The state’s gross state product will average $211.8 million more annually.


The federally financed share of the transportation projects will increase the size and composition of the regional economy. Federal in-state spending on these construction projects is estimated to total $4.2 billion over the next three decades, affecting the economy through what Perlich calls “the multiplier process. With construction workers come their families, and those families then buy groceries and homes,” she says.


“Many studies focus on how transportation affects a region’s economy, but this particular study focused on the impact of the construction itself, which is a bedrock industry in the state,” says Perlich. “That economic activity over 26 years is far from trivial,” which is why findings of the study were presented to the Utah State Legislature’s Transportation Planning Task Force in the fall.


“Funding for transportation in the state is uncertain as the federal budget is now deficit again and the economy is not as strong. That’s part of what the transportation planners and public policy people will have to consider,” Perlich explains.


The study also found:



· The new capacity construction spending will average $531.6 million annually over the 27-year period and will include average annual spending of $163.4 million by UTA (transit), $226.9 million by the Wasatch Front Regional Council (highways), and $141.3 million by Mountainlands Association of Governments (highways).

· Because of the economic activity generated by federal transportation construction dollars, personal income will be larger by an average of $197 million annually. Incremental state income taxes will increase on average by an estimated $5.9 million annually.

· The total economic activity (both externally and internally financed) associated with the 27-year construction program is an annual average of about 8,500 jobs, including approximately 3,400 in construction, the majority of which are in the heavy construction sector. The associated population impact averages about 11,600 annually. Average annual personal income associated with the construction projects if $640.4 million while the average annual GSP associated with this economic activity is $639.9 million. State income taxes generated by this economic activity are on average $19.2 million annually.


The complete report can be found at http://www.business.utah.edu/updir/1459_bebr_Sep-Oct%202004.pdf

Media Contacts For This Story

Senior Research Economist, Bureau of Economic and Business Research, U of U
Office Phone: 801-581-3358
Email address: pam.perlich@utah.edu