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What’s The Return On A $1B Construction Project In The Phoenix Area?

Recently, the Maricopa Association of Governments, MAG, added $1.25 billion in projects to its long-range regional transportation plan. So, what’s the potential economic impact?

If a study cited during Tuesday’s MAG meeting holds true, that $1 billion should support about 28,500 jobs.

Ken Simonson, chief economist for the Associated General Contractors of America, told MAG’S economic development committee, that about half the jobs are considered "induced" - for example, restaurant workers serving construction workers. 

"Others, if you asked them to keep a diary of what they did with the additional spending, perhaps you could say that truck dealership got another sale because of this deal,” Simonson said. “But, generally it’s impossible to trace them, but by modeling we can see the lift to the economy.” 

Based on the economic modeling done in 2009, a professor at George Mason University determined that $1 billion spent on non-residential construction created an economic impact of $3.4 billion.

The study found direct and indirect jobs make up about half of the 28,500.

Direct jobs include people pouring concrete, project supervisors and accountants. While indirect are jobs that cannot be directly traced to construction projects, but they’re identified by researchers who use economic models. These include jobs tied to equipment and materials that are used on projects along with financial services.

When other previously scheduled freeway and transit projects are added to the recent $1.25 billion announcement, MAG said total spending hits $5.7 billion.

As a senior field correspondent, Christina Estes focuses on stories that impact our economy, your wallet and public policy.