The Stimulus Package And The Construction Market
On February 16, 2009
By Scott Wolfe Jr
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It’s official: The Stimulus package has passed Congress and is expecting the President’s signature early this week.
Now that the parameters of the “economic recovery” package have been set, the construction industry can step back to determine whether and how the stimulus can help.
It’s no secret that the construction industry has been closely monitoring the economic stimulus legislation. With residential construction spending sinking to new lows each month, organizations like the Associated General Contractors of America have been lobbying the legislature to “invest in the country’s infrastructure” as an attempt to equalize some of the woes of the private sector with growth in the public sector.
Notwithstanding the lobbying efforts of trade organizations and the monitoring of the stimulus bill, it’s nearly unanimous among commentators on the subject that construction companies will likely be the biggest beneficiaries of the stimulus deal.
The clear next question, of course, is “how?”
Frost Brown Todd, LLC published a blog article about “What Contractors Need To Know“ about the House version of the stimulus package. While not a direct analysis of the final bill, the article is still very relevant to it, explaining a number of details about the bill, where stimulus money will be allocated and why the construction industry may benefit from the spending.
Perhaps the best break-down of information comes from The Associated General Contractors of America website, which provides a state-by-state stimulus impact chart.
The AGC’s website also provides PDFs for each state, with a detailed status-briefing of the construct industry and an explanation of how the stimulus package may help. You can download the reports on Washington here, and Louisiana here.
The AGC’s summary of the Economic Impact of the Stimulus Investment in Louisiana is as follows:
An additional $1 billion in nonresidential construction spending would add about $2.2 billion to the state’s Gross Domestic Product (GDP), about $698 million to personal earnings and create or sustain 23,000 jobs.
The AGC’s summary of the Economic Impact of the Stimulus Investment in Washington is as follows:
An additional $1 billion in nonresidential construction spending would add about $2.4 billion to the state’s Gross Domestic Product (GDP), about $753 million to personal earnings and create or sustain 20,000 jobs.
This article has discussed the stimulus package and how it may impact the construction industry. Tomorrow, we’ll discuss how the stimulus package may affect your construction business….and give you tips on how to take advantage of the increase in public construction spending!
Now, for some comic relief, here is a clip of Mr. Stephen Colbert’s discussion of the Stimulus debate:
About the Author: Scott Wolfe Jr
Scott Wolfe, Jr. obtained his J.D. degree from Loyola University of New Orleans, and his B.A. from Southern Methodist University in Dallas, TX. In 2006, 2007, 2008 and 2009, Scott was recognized as a Leader in Law by CityBusiness Magazine. The son and grandson of general contractors, Scott is a construction litigator in the Pacific Northwest, and the founding member of the bi-coastal law firm, Wolfe Law Group. Scott is also the founder and CEO of Express Lien, Inc., a legal document preparation service for contractors. In 2008, City Business Magazine recognized Scott as one of its Innovators of the Year for the Express Lien concept. As an entrepreneur himself, Scott has a strong background in business and commercial transactions and laws. He focuses his practice on the legal issues facing the construction industry, and has represented clients in multi-million dollar construction disputes in litigation and alternative dispute resolution proceedings. Scott is a LEED AP.
A great article, and a good summary and overview. Here’s hoping our friends and clients in the construction industry get some help out of this.
The Stimulus Package And Your Construction Business
While the private contracting business has suffered setbacks in the current economy, one bright spot has remained: the growth of public and federal construction spending. This article discusses how your company can claim its share of federal construc…
It will be interesting to see whether government bureaucracy and the construction industry have the capacity to absorb half of $149.8 billion in contracts to be bid and awarded within the next 120 days.
Chris – I’m with you on hoping that our friends and clients get a piece of this pie. But, like James McConnell, I’m interested in how this all plays out.
Thanks for stopping by guys, and commenting.