US stimulus fund failing to boost construction jobs!

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Written by Becca Wilkins – 04 Aug 2009

Funding from the US stimulus construction program is having little impact on the amount of new jobs being created within the industry according to The Associated General Contractors of America (AGC).

In a statement the AGC said the “disappointingly” slow pace of construction spending outside of the transportation sector is one of the main reasons why relatively low numbers of new staff are being employed.

The AGC said while the Army Corps of Engineers is responsible for US$ 4.6 billion in stimulus construction funds, the agency has only allocated US$ 715 million and paid out US$ 84 million. Meanwhile, the General Services Administration has only allocated US$ 656 million and paid out US$ 12 million of its US$ 5.9 billion stimulus construction funds, the AGC added.

Stephen Sandherr, AGC’s CEO said, “While the construction portion of the stimulus is having an impact, it is far from delivering its full promise and potential.

“With construction unemployment at almost double the national rate, it is disappointing to see so many stimulus programmes getting off to such a slow start.”

The US stimulus package, which has about US$ 135 billion earmarked for construction projects, was introduced five months ago but there is still little difference in hiring and purchasing patterns between companies involved with stimulus-funded work and those which are not, according to Mr Sandherr.

He said while 36% of construction companies with stimulus-funded work plan to hire new employees, an almost identical percentage of firms without stimulus-funded work report plans to take on new staff in 2009/10.

He added 36% of construction companies with stimulus-funded work are planning to purchase new equipment and supplies, but a higher rate – 43% – of construction firms without stimulus-funded work are planning to purchase new equipment during the same period.

Rather than creating new jobs the stimulus fund is more successful at this point in helping construction companies save existing jobs Mr Sandherr said, adding that 60% of construction firms with stimulus-funded work report they have saved or retained jobs.

Construction companies with stimulus-funded work do plan to make larger equipment purchases than their colleagues without stimulus funded work, the AGC stated.

“The stimulus is clearly working,” Mr Sandherr said. “It just isn’t working fast enough for many construction workers in many communities.”

He added the AGC has written to federal government agencies urging quicker delivery of the stimulus funds.

“The stimulus will keep our industry alive, but it will not turn around a trillion dollar construction industry overnight,” Mr Sandherr said.

AGC’s industry analysis was based partly on a survey of almost 1000 US construction companies. The survey results were combined with the association’s analysis of federal and state agency stimulus activities, and a review of employment data from the US Bureau of Labor Statistics.

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