Industry to see greater effects of stimulus in 2010

Of the $787 billion in the American Recovery and Reinvestment Act of 2009, $35 billion is appropriated for buildings, much of which will begin to infiltrate the economy in 2010, said Ken Simonson, chief economist of The Associated General Contractors of America, during Reed Construction Data's Oct. 22 forecast Webinar. Of the $35 billion, $7 billion will go for Department of Defense projects that include restoration and modernization of facilities; $6 billion to General Service Administration projects, including $750 million for federal buildings and courthouses, $300 million for ports of entry and $4.5 billion for energy-efficiency upgrades; $6 billion to other federal building; $8 billion to Housing and Urban Development that includes $4 billion to the public housing capital fund and $2 billion to the redevelopment of abandoned or foreclosed properties; and $0 to $9billion is discretionary. See Trends & Analysis from the November issue for more information.

“With the building portion of the stimulus, we hear constantly that [contractors] don’t think there’s anything in it. But, really, there is a total of $35 billion there that is just scattered through a range of agencies,” Simonson said. “Where there have been contracts, it hasn’t necessarily led to job creation. It is possible there will be a lot more flowing in [2010]. The federal agencies didn’t get it out of the door as fast as they could have.”

The economic impact of putting money into nonresidential construction is notable. An estimated 28,000 jobs are created for every $1 billion, Simonson said. One third of the jobs are direct, onsite; 1/6 are jobs in indirect, supplying industries; and ½ come from direct and indirect spending.

The stimulus also appropriated $30 billion for energy technology that includes $6 billion for energy grants for efficient technologies, such as solar, and $5 billion for weatherization grants that includes funding for window replacements.