Mixed Messages for the Construction Industry on the Stimilus and State of the Economy
On January 1, 2009, the forecast for the construction industry and the American economy in general was reported grim.
Since then, however, we've sworn in a new President, Congress passed an aggressive (albeit controversial) "Stimulus Package," and the dead of winter has bowed to a new Spring - typically a more productive time of the year for construction.
So where are we?
Well, the news for the construction industry carries mixed messages.
Let's start with the bad news: McGraw Hill Construction reports that February construction dropped 8% from January, and Reuters predicted that construction jobs will continue to report weak throughout 2009.
In an interview with Reuters, Chief Economist for the American Institute of Architects (AIA), Kermit Baker, had this to say about the economy and the stimulus:
The Obama stimulus will put some people to work as soon as next month, but it will not be a major factor until the third quarter, Simonson said. Even then the stimulus will have little visible impact on payrolls, since contractors will use existing workers before they bring back people who have been laid off or start to hire new people.
The good news, of course, is laced within the forecasted bad news: the stimulus.
No one is certain of how large the impact will be, but many in the construction industry are already sizing up the stimulus opportunities and other available government work.
Ken Simonson, the chief economist for the Associated General Contractors of America, had a positive outlook for business and employment in the construction industry and the benefits of the stimulus. During a talk to association members, he said:
It’s not going to be enough to bail out construction right away...but it’s a start.
Already stimulus money is being allocated towards real construction projects and creating jobs. See this story about $101 million in transportation work in Oregon, or the Larose bridge project in Louisiana. Even Monster.com has published an article about how the stimulus package will spark construction jobs.
The stimulus certainly gives the construction industry optimism, but from all accounts, it appears to be cautious optimism.
