A new national analysis finds that closing the United States’ widening water infrastructure investment gap could generate trillions of dollars in economic benefits, support more than one million jobs annually, and reduce the growing risks linked to ageing drinking water, wastewater, and stormwater systems. The report, Tapping Potential: The Economic Benefits of Investing in Water Infrastructure, was released by the US Water Alliance in partnership with Stantec and One Water Econ.
According to the assessment, the country faces nearly 3.4 trillion dollars in capital needs over the next 20 years. When operations and maintenance are included, the total climbs to almost 7.7 trillion dollars. Much of the nation’s water infrastructure was built decades ago and is operating beyond its intended lifespan. Federal funding has dropped sharply since the 1970s, leaving states, municipalities, and ratepayers responsible for more than 90 per cent of annual investments in water systems.
The report estimates that meeting all identified funding needs would require 384 billion dollars per year. Current spending levels fall short by about 140 billion dollars annually, creating a cumulative gap of 2.8 trillion dollars over two decades, even if recent federal funding levels from the Infrastructure Investment and Jobs Act continue. If federal funding reverts to pre-IIJA levels, the shortfall would grow to nearly 2.9 trillion dollars.
Economic modelling in the report shows substantial national gains if this gap is closed. Every one million dollars invested in water infrastructure generates 2.6 million dollars in economic output, 1.4 million dollars in GDP, and supports approximately 10 jobs. Meeting the full need for investment would generate an estimated 7.3 trillion dollars in economic output and 3.9 trillion dollars in GDP over 20 years. More than 1.4 million jobs per year would be supported across the economy, including in construction, manufacturing, engineering, and local service sectors.
Every one million dollars invested in water infrastructure generates 2.6 million dollars in economic output, 1.4 million dollars in GDP, and supports approximately 10 jobs
The report also quantifies the cost of inaction. A single nationwide day without water service would result in 121.8 billion dollars in lost economic output and nearly 527,000 lost jobs. Water-dependent sectors such as healthcare, food and beverage production, accommodation, and manufacturing would face steep losses. Households would feel the impact as well, with an estimated daily cost of 209 dollars for an average family due to the loss of basic water services.
Rural communities face especially acute challenges. Per capita water infrastructure needs in rural counties are nearly twice those in urban areas. With lower household incomes and smaller ratepayer bases, many rural systems face significant affordability barriers as they confront rising costs associated with repairs, regulatory compliance, and PFAS treatment requirements.
The report’s authors argue that sustained investment would not only modernise essential systems but also secure long-term economic resilience. Water sector jobs tend to be stable, well compensated, and accessible to workers without four-year degrees. However, the workforce is ageing, with more than a quarter of employees over age 55. The report notes growing demand for new workers as systems expand, regulations evolve, and experienced staff retire.
The analysis concludes that delaying investment will increase costs and risks, while long-term funding commitments would strengthen communities, protect public health, and generate broad economic benefits.
