June 10, 2009

Employment and Infrastructure

U.S. stimulus helping ease construction unemployment

RICHARD GILBERT

staff writer

The rate of job losses in the U.S. construction industry is slowing as stimulus spending on highways and paving is helping create and save jobs.

“Employment in construction decreased by 59,000 in May, compared with an average monthly job loss of 117,000 in the industry for the previous six months,” said a report released by the U.S Bureau of Labour Statistics this month.

“In May, employment fell in nonresidential specialty trade contractors (30,000) and in residential construction of buildings (11,000).”

Construction employment dropped by 110,000 jobs in April, 126,000 in March, 104,000 in February and 111,000 jobs in January.

“We saw the number of construction jobs start to decline back in March 2008 and have seen an increase in competition for projects,” said Don Laskey, president of Laskey-Clifton Corporation in Coos Bay, Oregon. “We got some national paving jobs worth $5 million, which saved 15 jobs.

“We expect to create seven new jobs and that could go up to 14 due to stimulus spending.”

Laskey said his company normally employs about 43 to 75 workers.

Other contractors believe stimulus spending has also helped them add or save hundreds of new jobs, during this period of decline.

“Since 2007 we have lost 240 employees and we now have 108 employees,” said Rick Harlan, president of, A.M. Cohron & Sons, Inc., which is based in Atlantic, Iowa.

“We have three stimulus projects that have allowed us to keep 30 employees.”

Jim Hayne, president of General Constructors, Inc. in Bettendorf, Iowa said his company has worked in the industrial and municipal markets in the last five years.

However, General Contractors has benefited from stimulus spending because they have experience in highway construction.

“We are very fortunate that we are able to move from the private to the public market and do work on stimulus road work projects,” said Hayne.

“We have 40,000 man hours on two stimulus highway projects, which allowed us to rehire 17 people and hire four more. We are going to hire 10 more people in the next two weeks.”

Laskey said most of the stimulus spending has been in specific areas.

“There has been a lot of bid letting highways and paving jobs, but there have been very little water and wastewater treatment jobs,” said Associated General Contractors of America’s chief economist Ken Simonson. “It is a more complex process to come up with documents for bids, get in bids and award projects.”

However, there are some exceptions to this general trend.

Michael Welch, president of Topeka Kansas-based BRB Contractors said his company was awarded $8 million in stimulus funds from the Environmental Protection Agency to build a wastewater treatment plant.

This project has helped his company retain 40 employees.

One problem with the water and wastewater treatment projects has been a buy American clause.

John McKaskie, president, Swank Associated Cos, which is based in New Kensington, Pennsylvania, said it can be difficult to get certification that materials or components are made in the U.S.

The problem can delay projects.

Laskey said that products required on these projects aren’t necessarily made in the U.S. When American products can be found, Welch said they can cost considerably more.

“We need to make sure needless red tape and regulations don’t keep construction workers off the job.” Simonson said.

The speed at which the government is able to implement stimulus spending has also been a concern.

Laskey said permitting is a key barrier to spending and a nationwide effort is needed to streamline the process.

Welch said most of the government agencies responsible for permits were already working at full capacity and the stimulus spending has increased their workload. He is concerned that the agencies don’t have the staff to do the work.

By contrast, Christian Zimmermann, president of Pike Industries in Walpole, New Hampshire said the government in New Hampshire has tried to cut the average 60 to 90 day wait for permits in half.

“They have done a good job of moving up jobs and getting work on the street,” he said.

He also said the state of Maine had some contracts signed within days of the stimulus bill being signed.

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