Show Us the Money! Stimulus Dollars Delayed

Troubling Employment Data Underscores Need for Speedy Distribution of Stimulus Funds, AGC Economist Ken Simonson Notes

Construction employment fell in 276 of the nation’s largest 299 metro areas from April 2008 to April 2009, according to a new analysis of government data conducted by the Associated General Contractors of America’s chief economist Ken Simonson. The data highlights the critical need for the federal government to move quickly to invest stimulus funds without needless requirements that could hamper recovery efforts, he noted.

“Job loss figures like these are exactly what prompted Congress and the Administration to craft a stimulus package designed to get Americans back to work as quickly as possible,” said Simonson. “Putting these funds to good use as quickly as possible is the best way to get Americans back to work and the economy back on track.”

Among the communities seeing the largest declines in construction employment were Tucson, Arizona with a 29.2 percent decline, Redding, California with a 31.6 percent decline, Reno-Sparks, Nevada with a 29.1 percent decline, Cape Coral-Fort Myers, Florida with a 23.6 percent decline, and Pascagoula, Mississippi with a 38.8 percent decline. By comparison, construction employment grew in only 19 metro areas, led by an 8.0 percent gain in Odessa, Texas, a 7.3 percent in Baton Rouge, Louisiana and a 5.7 percent in Decatur, Illinois. Simonson noted that the construction sector has seen the largest decline in employment relative to the rest of the economy. For example, overall construction unemployment was at 18.7 percent in April 2009 while the overall unemployment rate was 8.6 percent, not seasonally adjusted. Indeed, while construction accounts for one fifth of the U.S. workforce, construction workers account for twenty percent of all jobs lost in the past year.

However, Simonson cautioned that uncertainty over the application of Buy American provisions was potentially delaying the award of some projects, driving up the cost of others and even forcing contractors to rip out pipes already laid for at least one project in California. He added that some local water and sewer agencies were reportedly forgoing stimulus funds because of onerous certification and reporting requirement.

“We need to make sure needless red tape and regulations don’t keep construction workers off the job.” Simonson said. “There’s a real risk that Buy American provisions, for example, could undermine the very purpose of the stimulus… to get Americans working again.”

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