Road industry contributes $236B to Australian economy, RA study finds

Australia’s roads sector is contributing $236 billion in value to the nation’s economy each year and supporting the jobs of around 1.4 million workers, according to a study released today by Roads Australia (RA) – the peak body for roads within an integrated transport system.

The study – commissioned by RA and prepared by BIS Oxford Economics – also highlights the massive pipeline of integrated transport infrastructure projects being rolled out. Road construction activity alone is set to peak at $29.2 billion in 2023-24. This is just one component of the Federal Government’s broader $110 billion 10-year infrastructure program and record investment in transport infrastructure by state and territory governments.

“As well as highlighting the significance of our industry’s contribution to the economy and the community, this study underscores the urgency of progressing policy reforms that will support project delivery,” said RA CEO Michael Kilgariff.

“Road infrastructure is largely taken for granted in day-to-day life, and yet it is the foundation of Australia’s modern urban environment – and all the productivity and employment benefits that flow from that.

“Light rail and bus services, as well as active transport (walking/running and cycling) are all facilitated by the road network, with these forms of transport all having their own benefits to health and the environment. Similarly, our road network is critical to obtaining the goods we rely upon to live, with roads essential to connecting freight that transits through rail, sea, air and inland port facilities with producers and consumers.”

Mr Kilgariff further noted the impact of the road construction industry on the broader economy.

“The study confirms that for every $1 million invested in our road construction industry, $2.9 million in output is contributed to the economy, and $1.3 million of value is added to Australian GDP. Looking at road transport’s contribution to overall economic activity as measured by Gross Value Added (GVA), the road transport industry comprises 4.5 per cent of GVA. For comparison, this places it at around the same level as retail trade, which sits at 4.7 per cent.”

With road construction alone expected to contribute $306.2 billion in output to the economy over the next four years, the RA Chief said it was vital to secure policy changes that would enable the industry to deliver integrated transport projects “more efficiently, sustainably and in line with changing community expectations.”

“RA is actively working to bring governments and industry together to agree and advance reforms needed to continue providing the community with the economic and social benefits this study highlights,” Mr Kilgariff said.

“These include continuing to progress procurement reform, improving safety for road workers and road users, actively pursuing opportunities for decarbonisation, modernising our approach to road pricing, embracing the benefits of digitisation and crucially, enhancing the capacity and diversity of our industry’s workforce.”

To download RA’s study, click here.