Construction affects state, local economies

The Aquinas Photo / Emma Black CONSTRUCTION WORKERS are making progress on the Center for Rehabilitation Education. The project is expected to be completed in summer 2015.

The Aquinas Photo / Emma Black
CONSTRUCTION WORKERS are making progress on the Center for Rehabilitation Education. The project is expected to be completed in summer 2015.

Zach DYER
Staff Writer

The Northeastern Pennsylvania Alliance (NEPA) is a multi-county agency that provides economic planning to local governments in order to “enhance the economic development and quality of life of the are.”

NEPA has recently released a report entitled “The Economic Impact of the Center for Rehabilitation Education at The University of Scranton,” in which the writers analyzed the direct, indirect and induced impacts on the economy of the new rehabilitation center. Two economies are affected by the project: the Pennsylvania economy as a whole, which will benefit from the construction of the center, and the local economy, which will benefit both from the center’s construction and from the operation of the center that will take place following its completion in 2015.

The direct impacts of the center are those permanent jobs that are created by the project itself.

The indirect impacts are those jobs and wages created by businesses that provide essential goods and services to the construction of the project, like those materials that were used to create the I-Beams in the tower. The induced impacts are the wages that are spent by both direct and indirect employees on things such as goods, housing and transportation.

NEPA’s research and information manager, Steven Zaricki, gave an analogy to help make the impacts of the center more tangible.

“Those working for the indirect and induced economic impact have to eat, so imagine that they go out and spend money at a restaurant. Well, part of the money that they pay for their meal is going to the wages for the restaurant workers, who then could use that money in the local economy for things like buying clothes. That money that they are spending continues to go through the economy for five to six generations until it leaks out, or disappears,” Zaricki said.

The report essentially breaks the project into two phases — the construction phase and the operation phase.

The construction phase deals with two things: the temporary jobs created locally between 2013 and 2015 for the construction of the building and the impact on the state economy due to this construction (e.g., some of the beams used in the construction of the center are from Erie, so that would affect the state economy as opposed to just having a local impact).
The operation phase deals with the impact on the local economy following the center’s completion in 2015.

It is estimated that the total impact (the combination on the direct, indirect and induced impacts) on the Pennsylvania economy from construction, engineering and other expenses from 2013 to 2015 will be $44,487,451. The estimated impact on the Lackwanna County Economy from operation during 2016 will be $2,174,671.

“To me, the economic effects from the Center are all positive—the only time you would think of a negative impact is if there is job loss, and here we have additional jobs available,” Zaricki said.

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