The Return on Investment in Water Infrastructure is a Better Economy and Job Opportunities

By Dr. Mark LeChevallier – March 30, 2017 – Comment

I’ve written before about the various connections between water, infrastructure, investment, and job creation, but I’m just one Dr. Water. The Value of Water Campaign on the other hand, is a whole collective organization of experts from across the water industry, including American Water, and they recently commissioned an economic impact analysis to better understand how increasing investments in our nation’s water infrastructure can affect economic growth and employment.

The benefits that would be realized if the nation chose to make needed investments include the economic opportunities created by water infrastructure projects, as well as the provision of clean, safe, reliable water service to households and businesses.  Water sustains our families and our communities, and it also supports economic productivity. From semiconductor manufacturing to hotels and restaurants, virtually all sectors of the economy rely on water.

Many water and wastewater systems have been in operation for a century or more. As pipes, pumps and plants reach the end of their useful life, the capital needs of water and wastewater utilities are growing rapidly, yet federal investment in water infrastructure is less than half of what it was thirty years ago. Based on a 2016 assessment by the American Society of Civil Engineers (ASCE), the U.S. needs to invest an additional $95 billion per year in water infrastructure at all levels of government over the next 10 years to meet projected capital needs.

With water infrastructure capital needs growing rapidly, in 2016 American Water invested about $1.5 billion, the highest in the company’s history. $1.3 billion of that investment was dedicated towards regulated systems to improve service reliability and water quality for customers, and the plan is to invest more than $6B in the next five years. According to the Water Research Foundation, $1 billion invested in water infrastructure creates approximately 16,000 jobs, so $6B invested would mean 96,000 new jobs in the communities we serve.

With a life span of 75 to 100 years, much of the nation’s underground pipe systems and water mains are now coming due for replacement. Based on analysis by the American Water Works Association, approximately one-third of water mains nationwide will require replacement by 2040.

Water infrastructure is fundamental to our nation’s economic health, and by keeping it in a state of good repair, we maintain the strength of our economy. As this study shows, investments in water infrastructure generate high-quality jobs, increase the competitiveness of American businesses and lead to a significant injection in economic activity throughout the nation.