Study Finds Aggregate Industry Shifting Focus, Still a Stalwart in State Economy
A study of the economic impact of the aggregate industry in Illinois suggests that the industry has nearly recovered from the 2008 recession, with $1.1 billion in nonfuel mineral extraction (2013 data) compared with $1.2 billion during 2007.
But a closer look at the data shows annual production of sand, gravel and Portland cement in Illinois has dropped precipitously since 2007. Much of the recovery results from the growth of the silica sand industry. Illinois’ high-quality silica sand is used in oil recovery during the hydraulic fracturing process and is sold globally as “frac” sand.
The Prairie Research Institute study, published by the Illinois State Geological Survey (ISGS) at the University of Illinois at Urbana-Champaign, is the most comprehensive study of the aggregate industry’s economic significance to the Illinois economy. It includes state and federal data to provide a fuller picture of direct impacts, as well as demand-driven and supply-driven impacts on the state’s economy.
Published as Special Report 5,“Construction Aggregates and Silica Sand in the Economy of Illinois” was written by Subhash B. Bhagwat, retired principal mineral economist at the ISGS, who has studied the aggregate industry of Illinois for decades.
The study, commissioned by the ISGS, highlights that more than 4,900 workers are employed by aggregate producers and their direct suppliers (2012 data), with a payroll of $280 million. For every person employed in the aggregate industry, the study estimates 46 others are employed in downstream industries using aggregates. Their payroll totals 80 times that of the aggregate industry, $14.2 billion.
Other key findings are that
Every $1 in aggregates sold generates $0.60–$0.62 in wages for all Illinois workers (including those in the aggregate industry);
Every $1 paid to aggregate industry workers generates an additional $1.41–$1.47 in wages to workers in the rest of Illinois;
Every additional job in the aggregate industry generates an additional 1.74–1.86 jobs in the rest of Illinois;
Every $1 million in aggregates sold generates 12.2–12.3 jobs in Illinois (including those in the aggregate industry).
The aggregate industry includes mines and quarries producing crushed stone, sand and gravel, which are utilized in a wide variety of industries, including construction materials, oil and gas production, water filtration, foundries, glassmaking, electronics and agriculture.
Sand, gravel, and crushed stone extraction has remained largely centered around northeastern Illinois, close to where it is needed. Glacial deposits across the northern part of Illinois provide ready access to sand and gravel. Crushed stone is extracted mainly from the Silurian and Ordovician limestone and dolomite deposits that constitute the bedrock in northeastern Illinois, and from younger units in western and southern Illinois. The number of mines and quarries has declined over the past several decades even as demand has increased to support the growing population of northeastern Illinois counties.
Rapid urban growth has encroached into areas underlain by mineral resources, which creates opposing land-use demand. In some cases, this has caused crushed stone extraction activity to move farther away from the area of demand to avoid or reduce land-use conflict. The added transportation cost results in an increase in the commodity cost.
Sand, gravel and crushed stone extraction has remained largely centered around northeastern Illinois, close to where it is needed. Transporting imported construction material can easily double the price of the products, Bhagwat explained.
Photo by Zakaria Lasemi: Illinois’ crushed stone quarries provide essential materials for building transportation, residential, and commercial infrastructure. From Geology of Illinois. © 2010 University of Illinois Board of Trustees. For permission information, contact the Illinois State Geological Survey.