Simonson Says: Job Woes Spread, Underscoring Urgency of Stimulus and Credit Market Thaw

Construction job gains were confined to only three oil-producing states - Oklahoma, Louisiana (both 4 percent) and Texas (1 percent) - plus the District of Columbia (2 percent). At the other extreme were Utah (-22 percent), Arizona (-21 percent), South Carolina (-17 percent), Florida and Michigan (both -16 percent). Some of these states posted double-digit construction job increases just a few years ago, whereas Michigan has been shedding jobs all decade. Even the states that are still in the plus column had much larger gains in most of 2008, showing how ubiquitous the construction slump has become. The stimulus bill that the House passed on January 28 would slow the hemorrhaging in every state and turn losses into gains in some places. A study prepared last year for AGC by Professor Stephen Fuller of George Mason University showed that $1 billion of spending on nonresidential construction would add or save 28,500 jobs economy-wide, including 9,300 construction jobs. The House-passed version of the stimulus bill would pump roughly $150 billion into construction over two years, saving or creating between 600,000 and 700,000 construction jobs. Additional construction jobs would result from tax provisions that would trigger demand for structures and from other tax cuts and spending that would strengthen overall economic activity. The Senate version of the stimulus bill would allocate spending somewhat differently but fund roughly the same amount of construction. Thus, either bill would provide a significant boost to construction - if the money is obligated quickly. A second problem dragging down construction has been the lack of bank credit for developers and access to municipal bond markets for public agencies. Some news reports suggest these markets have begun to re-open. AGC wants to hear your experience with credit availability. Please email simonsonk@agc.org to say whether you have seen greater, less or no change in availability of credit for construction in recent weeks.