Organizations representing state and local officials have been adding to lists of infrastructure projects they say would be started quickly if they receive federal funds. Today, the U.S. Conference of Mayors released an 800-page update of its November 14 list of local projects that are "ready to go," saying, "In this second installment, 427 cities reported a total of 11,391 infrastructure projects costing a total of $73 billion that would create 847,641 jobs." On Friday, the American Association of State Highway Transportation Officials (AASHTO) reported, "More than 5,000 'ready to go' projects worth $64 billion were identified in a new AASHTO survey of all 50 state transportation departments plus the District of Columbia. These transportation infrastructure projects could be under contract within six months if Congress includes them in an economic stimulus bill. They would support an estimated 1.8 million American jobs if the funding were made available."
President-elect Obama pledged in a radio and Internet address on Saturday that he would “save or create” 2.5 million jobs within two years. “Obama said the massive government spending program he proposes to lift the country out of economic recession will include a renewed effort to make public buildings energy-efficient, rebuild the nation's highways, renovate aging schools and install computers in classrooms, extend high-speed Internet to underserved areas and modernize hospitals by giving them access to electronic medical records,” the Washington Post reported on Sunday .Obama offered few details and no cost estimate for the investment in public infrastructure. But it is intended to be part of a broader effort to stimulate economic activity that will also include tax cuts for middle-class Americans and direct aid to state governments to forestall layoffs as programs shrink. House Speaker Nancy Pelosi (D-Calif.) has called for spending between $400 billion and $500 billion on the overall package. Some Senate Democrats and other economists have suggested spending even more—potentially $1 trillion—in the hope of jolting the economy into shape more quickly. At a meeting with Obama in Philadelphia last week, governors estimated that there are $136 billion worth of projects that are ‘ready to go’ once money rolls in….In keeping with the secrecy that surrounds the development of his recovery plan, Obama has given the governors no commitment about how much money they would receive for such projects.”
Meanwhile, the fiscal outlook for states continues to worsen. The National Conference of State Legislatures reported on Thursday in State Budget Update: November 2008, a survey of the nation's state legislative fiscal officers, that states face a $32 billion budget gap after already closing a $40 billion gap since the current fiscal year began. Their projections for the next fiscal year, which begins July 1 for most states, reveal another $65 billion gap. The largest projected gaps for fiscal 2010 are in Arizona, 24.2%, New York, 20%, California, 18%, Wisconsin, 17.2%, and Minnesota, 14.7%.
Nonfarm payroll employment plummeted 533,000, seasonally adjusted, in November, the biggest drop in 34 years, and the unemployment rate rose from 6.5% in October to 6.7%, the Bureau of Labor Statistics reported on Friday. Job losses for September and October were revised sharply higher, and the 12-month job loss totaled 1,870,000 (-1.4%). Construction was one of the hardest-hit industries, losing 82,000 jobs in the month and 568,000 (-7.6%) over 12 months. All five construction employment categories lost jobs for the one- and 12-month periods: residential building, -6,000 and -104,000 (-11%); nonresidential building, -13,000 and -54,000 (-6.8%); heavy and civil engineering construction, -12,000 and -77,000 (-7.7%); residential specialty trade contractors, -29,000 and -234,000 (-11%); and nonresidential specialty trades, -21,000 and -99,000 (-3.8%). Yet average hourly earnings in construction have risen more ($1.01 per hour or 4.8% in the past 12 months) than for all private-sector production or nonsupervisory workers (76 cents or 4.3%). Architectural and engineering services employment, a harbinger of future demand for construction, fell for the fourth straight month, by 10,000, bringing the 12-month loss to 12,000 (-0.8%).
Orders at U.S. factories fell 5.1% in October, seasonally adjusted, after slumping 3.1% in September and 4.3% in August, the Census Bureau reported on Thursday. Orders for construction machinery tumbled 26% in October, following a rise of 5% in September and a plunge of 12% in August. Orders for construction materials and supplies fell 0.5%, 2.6% and 3.8%.
Recent price reports for construction inputs have been mixed. Today the Energy Information Administration reported the national average retail price of on-highway diesel fuel was $2.51 per gallon, down 10 cents from a week ago and 81 cents (24%) from a year ago. The Illinois Department of Transportation reduced its bituminous price index for liquid asphalt to $506.67 per ton, effective December 1, down $67 (11%) from November 1 and down $218 (29%) from its peak on August 1, but up $191 (61%) from a year ago. The Institute for Supply Management reported on Thursday that purchasing executives from nonmanufacturing sectors listed several items important to construction were both up and down in price in November: aluminum (down), aluminum products (up), fuel (both), stainless steel (up), steel (down) and steel products (both). Copper and copper pipe and products, diesel fuel and fuel surcharges were down.
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