Infrastructure woes take toll on US economy-engineers

WASHINGTON, July 27 Wed Jul 27, 2011 11:00am EDT

WASHINGTON, July 27 (Reuters) - Failing infrastructure will cost the United States billions of dollars in lost productivity, income and trade in coming decades, according to a civil engineering report released on Wednesday that said the impact on gross domestic product could reach $2.7 trillion.

The American Society of Civil Engineers regularly tallies the amount needed to upkeep declining U.S. roads, bridges and waterways. It said the country will need to invest roughly $220 billion annually to maintain the country's infrastructure in "minimum tolerable conditions."

It said the gap between infrastructure needs and federal funding is growing.

"If present trends continue, the funding gap for rail and bus transit, seen as 41 percent in 2010, is expected to increase to 55 percent in 2040," it said. "The expected gap in highway funding, 48 percent in 2010, is expected to increase to 54 percent by 2040."

Those gaps will take tolls on the economy.

The group looked at costs to individuals, such as vehicle maintenance and wasted time in traffic, as well as inability to commute to good-paying jobs. It weighed the costs of crumbling roads on exports and the effects on highly populated states and regions.

In 2010, it said, deficiencies in surface transportation systems such as highways cost individuals and businesses $97 billion for vehicles, $32 billion in travel time delays and $1.2 billion on safety.

Altogether, traffic and poor capital works conditions cost Americans $130 billion last year, the group said, a figure that will likely rise to $2.97 trillion by 2040.

At the same time, the lost cumulative GDP will be about $2.7 trillion by 2040.

"Although infrastructure deficiency creates jobs in sectors such as auto and bus repair, retail sales of gasoline, services and parts purchased, due to the deficiencies and decreased productivity per worker, critical job opportunities are lost in highly skilled and well-compensated non-transportation sectors," the group said.

Without improvement to the country's transportation system, the economy will lose 400,000 jobs by 2040, it said, and income will take a hit.

"By 2040 American households will be not only earning less in income; they will also be spending $54 billion more on transportation costs than they would with a fully sufficient system," it said.

Job losses will be greatest in the Mid-Atlantic region, and then the West.

Urban areas with high population concentrations will be hurt if transit and freeway systems are not improved. More than half of the pavement in the far west is deficient, hurting commuting and trade.

The report said that in the Mid-Atlantic region, 44 percent of the pavement is deficient and interruptions to bus and rail transit services are high. The region the most reliant on bus and rail transit in the country.

Without improvements to infrastructure, the group said, the U.S. trade position will also worsen. It expects the United States to export $28 billion less in goods "than would have been the case with sufficient infrastructure" in 2020 and $72 billion less in 2040. (Reporting by Lisa Lambert; Editing by Dan Grebler)

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