CSCMP's Supply Chain Quarterly
October 21, 2018

What's the ROI for infrastructure?

It's not easy to measure the return on investment in things like roads and bridges. We all know they can pay off in improved safety and reduced congestion, but how much exactly?

I'm sure that U.S. Secretary of Transporta tion Ray LaHood didn't quite mean what he said when he told the Senate Budget Committee, "There's a lot of lousy bridges and roads that need to be constructed."

While the comment is amusing, LaHood's larger point was a crucial one—one that is frequently acknowledged and too seldom addressed: The United States' transportation infrastructure is in sore need of investment in repairs, upgrades, and added capacity.

It's not as if the nation doesn't already spend a lot on such projects, but the need is far greater than the resources allotted to them. LaHood told the committee that the Department of Transportation has a backlog of between US $80 billion and $100 billion in high-priority infrastructure-improvement projects that it cannot afford to fund, according to a report on

Infrastructure projects were intended to be an important part of the United States' federal plan to stimulate the economy, and with good reason. One is jobs. The Associated General Contractors of America estimates that 25 percent of construction workers are unemployed, so the need is great. But spending on infrastructure is not just federal largesse intended to make work. It is a form of investment crucial to our economic well-being.

For several years now, businesses that move goods or depend on their movement have sought to convince policymakers of the importance of a sound, efficient national infrastructure to our economic strength. Trouble is, it's not easy to measure the return on investment in things like roads and bridges. We all know they can pay off in improved safety and reduced congestion, but how much exactly?

We may soon have some answers. As Janet Kavinoky writes in her article on infrastructure, "At a crossroads," the U.S. Chamber of Commerce is launching an effort to measure the performance of the nation's infrastructure and quantify exactly how it affects the U.S. economy. The trade group will create national and state performance indexes for each of what it considers the four core sectors of U.S. infrastructure: transportation, energy, broadband, and water.

The transportation index will be the first one the chamber issues. Once Congress turns its attention to the next round of transportation funding authorization bills, the index could provide just the sort of information needed to show how investment in roads, bridges, and so forth pays off for the entire nation—not just in construction jobs but in providing the clear arteries required for a healthy and vibrant economy.

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