Date: Mar 05, 2009
Press Release Number: 29
PORT AUTHORITY STUDY SHOWS SIGNIFICANT JOB CREATION, ECONOMIC ACTIVITY GENERATED BY WTC REBUILDING
|More than 26,000 Direct Jobs Created; $14.5 Billion in Economic Activity Generated
At a time of national economic uncertainty, the public rebuilding of the World Trade Center will result in tens of thousands of good-paying jobs and a significant boost in regional economic activity, according to a Port Authority economic stimulus study released today.
Presented at today's Board of Commissioner's meeting, the Port Authority study showed that public investments in World Trade Center projects, including One World Trade Center, the Freedom Tower; the World Trade Center Transportation Hub; the National September 11 Memorial & Museum; World Trade Center retail and other related infrastructure will result in the creation of 26,538 direct jobs, including on-site construction, architecture and engineering, and program and construction management. Including indirect jobs, such as those generated by industries that supply services, materials and machinery to the rebuilding effort, the jobs number grows to 62,336.
The World Trade Center projects also are expected to generate $3.7 billion in direct and indirect wages and total economic activity of $14.5 billion.
The number of jobs at the World Trade Center is rising just as the number of overall construction jobs across the region is declining. A recent report by the New York Building Congress found that New York City's building boom will peak this year, and the number of city construction jobs is projected to fall by almost 30,000 by 2010.
Port Authority Chairman Anthony R. Coscia said, "The World Trade Center rebuilding effort is an economic shot in the arm for our region at a difficult time. This investment in our region's future is also helping us in the present - by creating tens of thousands of jobs and generating billions for our local economy."
Port Authority Executive Director Chris Ward said, "What sometimes gets lost is that the public investment at the World Trade Center site is among the largest economic engines in the region. It is more than just steel, bricks and mortar. It's a real stimulus to the local economy."
During today's Board meeting, Executive Director Ward also provided a status report on the construction of One World Trade Center. The highlights include:
METHODOLOGY OF ECONOMIC IMPACT STUDY
The ensuing economic analysis focuses on the generation of jobs, wages and sales or economic activity. There are three distinct effects: direct, indirect and induced. Direct effects relate to activities such as architecture and engineering, on-site construction (new as well as maintenance), program and construction management. Indirect effects pertain to the various rounds of purchases of materials and services needed to undertake the construction of the facility or execute a program. Induced effects occur when workers involved in direct and indirect activities spend their wages on consumer goods.
The Port Authority Regional Input-output Model was used to generate the economic impacts. The region consists of New York City, the New York Suburbs (Nassau, Suffolk, Westchester, and Rockland counties), and Northern New Jersey (Essex, Hudson, Bergen, Passaic, Morris, Middlesex, Somerset, Union).
Throughout the analysis, every attempt was made to be as conservative as possible so that the results do not overestimate the impact on the region.
Generation of Construction Impacts
The level of capital spending for each category served as the starting point for the construction impact. In line with the guiding principle to remain conservative in our projections, several items were deleted from generating indirect and induced effects because their economic benefits would be difficult to quantify. The excluded items consisted primarily of soft costs such as financial expense and insurance. For PA spending, we also excluded expenditure related to PA staff. On the average, the exclusion was 20 percent of total spending.
The Port Authority Regional Input-Output Model was then employed to estimate jobs, wages and sales.
GLOSSSARY OF TERMS
Sales or Economic Activity - The value of output generated in the 17-county Port District.
Employment - Employment refers to work-years of labor measured in terms of full-time equivalent jobs.
Direct Impact - The impact generated by architecture and engineering, on-site construction, program and construction management.
Indirect Impact - The impact resulting from increased activities of those industries that supply services, materials, and machinery needed to support direct providers.
Induced Impact - The impact resulting from increases in consumer spending by wage earners in all related industries.
2009 Dollars - All wages and sales figures used in this report are expressed in 2009 dollars unless otherwise indicated.
Wages - Payroll salaries and wages earned by employees in payment for their services. All benefits are excluded from this figure.
THE PORT AUTHORITY INPUT- OUTPUT MODEL
Input-output models, in general, and the Port Authority's Regional Model, in particular, focus on the interrelationships or flows of products between industries. The Port Authority's Regional Input-Output Model was first developed in 1978 and is continually updated to reflect changes in the regional economy as well as to integrate the results of regional studies, surveys and current regional data.
The mathematics of this technique is designed to capture the "ripple effects" of changes in the 17-county Port District. These ripple effects can be illustrated as follows. If industry "A" increases its production by $100 million, it purchases additional quantities of good and services from other industries. To meet "A's" needs, each of "A's" supplying industries increases its production, which, in turn requires additional quantities of their respective inputs. The producers of these inputs increase their output and so on, resulting in a domino effect throughout the economy.
The Port Authority's Regional Input-Output Model calculates total regional sales, person years of employment, and payroll wages resulting from the spending of industries or projects initiated in the region.
At the core of the Port Authority's Regional Input-Output Model is a matrix of inter-industry flows developed from the latest national input-output data assembled by the Bureau of Economic analysis of the United States Department of Commerce. This matrix represents the transactions of 490 industrial, governmental and consumer sectors of the national economy by capturing how each sector in the economy uses the output of other sectors in producing its own product and to what sectors its product is eventually sold.
In order to develop the national matrix of inter-industry flows into the Port Authority's Regional Input-Output Model, coefficients are developed that reflect the purchasing patterns of the 17-county regional economy by indicating what share of a product consumed in the region is actual