Value of Water Campaign: The Economic Benefits of Investing in Water Infrastructure

As part of the US Water Alliance's Value of Water Campaign, Stantec and One Water Econ conducted a national study of the United States' water infrastructure funding gap and its economic impacts. Chronic underinvestment in drinking water, wastewater, and stormwater systems has left a substantial funding shortfall that threatens service reliability and economic vitality. This analysis quantifies both the costs of inaction and the benefits of closing the gap, using updated infrastructure needs data and input-output economic modeling (IMPLAN) to capture ripple effects across the economy. The study builds on prior research by incorporating more comprehensive stormwater funding needs, emerging infrastructure needs (i.e., PFAS mitigation and lead service line replacement) and providing state-level breakdowns of needs and impacts. This abstract focuses on national-level findings. The findings illustrate the magnitude and stakes of the funding gap. In 2023 alone, roughly one-third of U.S. water infrastructure requirements (about $78 billion) went unfunded. If current funding levels persist, this annual gap could double by 2042, resulting in a cumulative shortfall approaching $2.4 trillion. The consequences of underinvestment are severe: a hypothetical one-day nationwide water service outage would cost an estimated $120 billion in lost economic output (including a $68 billion drop in GDP) and put over half a million jobs at risk. Conversely, investing to close the gap would generate broad economic benefits. Bridging the funding gap over the next two decades (approximately $161 billion per year) is projected to support about 1.2 million jobs annually and increase GDP by $165 billion per year. Every dollar invested yields robust returns-about $2.6 in total economic output and $1.4 in GDP for each $1 spent-while also enhancing public health, environmental quality, and resilience. Employment trends in the water sector reveal additional opportunities and challenges. Water infrastructure jobs tend to offer wages above the national average, with strong benefits in rural communities where economic opportunities may be limited. The sector supports a diverse range of occupations, from skilled trades and engineering to planning and operations, making it a key contributor to workforce development. However, workforce shortages and aging personnel present risks to long-term service reliability, underscoring the need for investment not only in infrastructure but also in talent pipelines. This collaborative research offers a data-driven case for sustainable water infrastructure investment. By quantifying both the costs of inaction and the returns of intervention, the study provides clear metrics to inform technical planning and policy decisions. It underscores that closing the water funding gap is not only critical to prevent service disruptions and economic losses, but also a strategic opportunity to stimulate job creation, economic growth, and long-term resilience.