Stimulus boosts construction spending

By josephine on May. 6, 2010.

 

The stimulus has gone from slowing declines in construction spending to increasing such spending, according to figures from the Associated General Contractors of America.

Total construction spending between February and March rose by almost $2 billion, according to the AGCA’s analysis of federal spending figures.

“If it weren’t for public investments in infrastructure and construction, this industry would be in free fall,” said Ken Simonson, the association’s chief economist, in a news release. “Fortunately, the stimulus is now helping rebuild a construction industry devastated by relentless declines in private-sector activity.”

Last moth, theAGCA reportedthat Florida had lost 70,800 construction jobs in February from a year earlier. However, the state added 1,000 construction jobs between January and February.

Private-sector construction, which dominates the market, slid by 0.9 percent, to $550.8 billion from $555.7 between February and March. But, public-sector spending rose 2.3 percent, to $296.5 billion from $289.9 billion in the same three-month period.

Association officials noted that high office and retail vacancy rates, along with underutilized manufacturing capacity, indicate private-sector construction will continue to decline through at least the end of the year.

“With no transportation bill, no aviation legislation and no water trust fund, the only thing waiting for this industry after the stimulus is a funding cliff,” AGCA President Stephen Sandherr said in a news release. “If things don’t change soon, all the stimulus will have been was a really expensive way to delay hardships and layoffs for thousands of construction workers.”