The aggregate impact of aggregates in Central Texas

The Austin American-Statesman recently published an interesting feature story on the economic, social and environmental impacts of the aggregates industry in Texas. Aggregates here refer to operations that quarry and process rock, sand and gravel. This particular section caught my attention:

“The aggregates association estimates that its members pump more than $4.8 billion annually into the Texas economy and that a single job at one facility supports nearly five outside jobs such as equipment manufacturing, sales and servicing.”

Those talking points are from the Texas Aggregates & Concrete Association. I tracked down the economic impact study that generated those statewide statistics and replicated the methodology for the ten-county service area of the Capital Area Council of Governments. The statewide study was completed by a think tank called the Phoenix Center, based in Washington, DC. The center used an input-output model developed by Emsi, a respected labor market analytics firm, so I used the same model to produce estimates for the ten-county Capital Area region—not so much as a fact-check on the Center’s work, but more for local context to complement the Statesman story. As these things go, the Phoenix Center’s study is well done, uses a widely accepted methodology and sound data, and it includes the necessary qualifiers. No gripes here about their work, given the scope.

But local data is preferable to statewide data, especially for controversial topics, and I’m guessing the Statesman story might have prompted a few calls to elected officials in the Hill Country. So here’s what I found in terms of the economic impact of the aggregates industry, as defined by the Phoenix Center, in the Capital Area region:

  • Nearly $100 million in value added to gross domestic product (GDP)

  • Approximately $49 million in direct earnings

  • 481 jobs (full-time and part-time)

  • More than $6 million in tax revenue

The factors used to calculate the ripple effects of jobs and economic impact deserve a fair bit of skepticism, but let’s be consistent and use the “multipliers” from the Phoenix Center study. Each job in the aggregates industry in the Capital Area supports somewhere between 1 and 1.5 other jobs in the overall economy through indirect and induced activity. Stated differently, get rid of all the jobs in the aggregates industry in the Capital Area region, and the entire economy would lose an estimated 1,500 jobs and $95 million in earnings.

That’s only a fraction of the $4.8 billion estimated impact on Texas statewide, but it’s certainly nothing to sneeze at, either. It’s fair to say the aggregates industry provides a boost to the regional economy, even if – as the Statesman notes – that’s only one part of the story.