Impact of Investment in Road Construction on Growth and Employment

Drawing on its macromodel and PROMETEUS model, WIFO studied the effect of investments by the Austrian road management service ASFINAG on macroeconomic parameters. The investment schedule provides for spending some € 1.4 billion in 2006-2010 (0.5 percent of GDP). In the wake of this scope of investment, the GDP will rise by up to 0.8 percent, with a multiplier of 1.3. In addition to construction companies, commercial and transport businesses as well as several other services will profit from these investments. Employment figures will rise by about 13,000 in the medium term (+0.4 percent). The state's net financial investment will improve by about 0.2 percent of GDP. It should, however, be noted that these figures are based on the assumption that expenditures will be borne by the private sector and taxes will not be raised.