WASHINGTON — Crumbling infrastructure may inhibit an economic recovery, the U.S. Chamber of Commerce said Thursday in a report that relies on a newly created index that measures transportation performance and ties it to the economy.
The report is the first of a series the Chamber will unveil.
The next reports will focus on energy, broadband, and water infrastructure and they all will be updated annually, said Thomas J. Donohue, the Chamber’s president and chief executive officer.
Other reports have shown no relationship between infrastructure spending and the economy, said Susanne Trimbath, CEO and chief economist of STP Advisory Services, who helped compile the report. But the Chamber’s report examines the economy’s relationship to infrastructure’s underlying condition and availability, among other things.
The report “proves for the first time” that there is a link between infrastructure and economic growth or decline, Donohue said at a luncheon to unveil the project’s results. It found that lackluster infrastructure could hold back an improvement in gross domestic product.
“Allowing the nation’s overall transportation performance to lag behind the average [transportation performance] of the top five states leaves about $1 trillion of potential GDP on the table,” the report found.
“As our economy recovers, the nation’s transportation infrastructure must be prepared to meet the projected growth in freight and population,” Donohue said. Between now and 2015, if transportation improvements are not initiated, a rapid decline in infrastructure performance will result in lost potential economic growth, he added.
Researchers used 21 main indicators and data collected for all modes of transportation, for the time period between 1990 and 2008. They performed statistical analyses to paint a picture of performance-related themes such as safety, reliability, and whether infrastructure in metro areas can sustain current demand and future economic growth. The report looked at major corridors, individual states and cities, and trends such as passenger travel and freight traffic.
Based on the data collected, the performance of the country’s transportation network improved about 6% during the 18-year period, but the country’s population rose about 22% and freight traffic rose about 27% during that time.
In order to facilitate an economic upturn, Congress and the Obama administration will need to approve a six-year transportation bill that has been stalled in the House for more than a year, Donohue said. He added that delaying votes on a six-year law to replace the one that expired last September was “a total abdication” of one of Congress’s responsibilities.
Donohue also implored Obama to include a White House plan for the six-year authorization in his next budget request, which will be released in February.
Without a transformative plan for long-term infrastructure improvement — one that could tap $180 billion to $200 billion of private-sector capital that is poised for investment in roads, bridges, aviation, and other facilities — the country could lose $336 billion of economic growth, he said.
“We’re going to crash into it, and hard, when the economy starts to really pick up,” Donohue said of current infrastructure woes.