How Much Will The Stimulus Help Construction?

poole_3

I'm looking for feedback to the following opinion taken from my blog constructonomics, thanks:

It's not a mystery to most that the US federal government is in the midst of a massive effort to stimulate the suffering American economy. Funding in the range of $800 billion will be phases into the pockets of companies and taxpayers to create jobs and make improvements to our infrastructure. But what may not be fully understood is how this money is apportioned and to whose pockets these dollars will soon be lining.

When I first got downwind (or down screen) of this package I honestly thought that all $800 billion was going to be pumped into the construction industry. I think my biased and slightly self interested mind took the information being fed to me and spun it to my therapeutic advantage. It was nice while it lasted.

The reality is that the division of funds is very complicated and resembles a linear algebra problem that would have required some serious cheating if it was given to me in college (I squeaked by without cheating, thank you). But the majority of this funding will be in the form of tax relief to (I think) public organizations. At least this is what I gather from the Recovery website put out by the government. I ran across a link to another stimulus website, and after reading it, I had to sit down to take several deep breaths while my migraine subsided.

So after I popped five Advil and removed the I.V. from my arm, I think I've brilliantly ascertained that about $136 billion will be pumped like portland cement into a construction industry that has an unemployment rate over 18%. And while this certainly isn't chump change, it is only 17% of the package and I'm skeptical about how much it will help a $1 trillion industry.

I certainly don't want to rain on the parade or poop out on the party, but I'm just wondering if someone should have spiked the punch a bit. While, I'm sure some folks tried to pour a little vodka in the kool-aid, the compromise reached spreads money around the public sector like one would throw out feed to the hen house.

The construction work that is being funded is very specific to the highway, transit, and infrastructure industry. To get jobs in this particular field, you must have experience with DOTs, and publicly funded projects. There are very legitimate concerns out there that the commercial construction industry will not resurface until 2011 or (gulp) 2012.

However, this helps, and I'm happy for the folks with highway and transit experience who will be pouring concrete like there's no tomorrow. However, for those of us in the commercial world, tomorrow could be a long way away.

Darren@Partners

Many of have become armchair economists during all this, we've certainly had the time to. I believe that whatever amount makes it in appropriations, 30%+ will be wasted by Washinghton et al. The remaining 70% or less will then have another 30% shaved off the top by big GCs awarded prevailing wage(read COMMUNIST) type jobs. It is a pipe dream to think there are magically going to be enough qualified road and bridge contractors to do this work (just one example). Meaning that much of that portion of the money will be wasted, projects awarded to the unqualified will result in those projects being shoddily done or incomplete. These projects will then need to be "remodeled" at a later date when the money is all gone leaving the infrastructure in worse shape than before.

There might be some positives in the projects that deal with school upgrades and the like, if they award process is transparent

BattleRidge

the road crews here are slammed. I dont see why they need a stimulus. The residentials taking the hit, they should cut a break for business wanting to put in their own commercial buildings as well.

Glasshousebltr

Great Thread Poole.

About the "2011 or (gulp) 2012" ...statement.....Thats only a couple years away man .....I do realize a man can starve in much less time but I also know what it's like on the bottom .....broke .......unemployed .....drunk ....face down on the floor ......rounding up dropped Cheetos because the old lady took the kids and went to her mothers.......at the best of time .....or the worst of time ......it still flys like time and all we can do is hang on and try to steer.

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Glasshousebltr

Energy is the future .....the education of it ......the construction of it ......the creation .....it's all there .....and there's room for most of us.

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maurisgreen

Nice discussion is going here. Thanks to sharing this with us. Very interesting and informative.

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wellbuilthome

I dont think the 800 billon is going to do a dam thing for any one in the resadential building trade.

The problem in my are is the home value dropped about 20+% and the banks will only lend 70% of the home value . This = no equity / cash for a new additions. (Bummer) I'm out of business?
Ive been getting calls for new bathrooms / kitchens but cant make the same money on a small jobs .( bummer) I hate working inside . I don't know how long the lean times will last.
On the up side I'm starting a nice 2 story addition with roofing siding new drive way paver walks etc . So we should be busy for 8 weeks before we start redoing all the bathrooms.

Michaeljp86

Dont forget about the "white male construction workers" thing. The big boys who do get the stimulus money for the road and bridg projects will probably be required to only hire non white guys for the job.

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JustaFramer

I can put gang forms together.

nEighter

Green. Only word you need to know. I am well on the path toward it. Learn it, live it, love it, make it.

Michaeljp86

I have a big black carbon foot print.

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Global warming is a myth, like evolution and the metric system.

nEighter

as far as the stimulus stuff is concerned though.. this is the direction for the "green".

Michaeljp86

Green in obamas bros pockets

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WisePainter

Obama is nothing more than a rouse to silence the 90% of Americans who are butthurt over George Bush.
What you meant to say is: "Green in the pockets of a corrupt and powerful 2 party system that will continue to exist longer than any of us".

a.k.a the "Untouchables".

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CF Construction

I've been out of the loop from the news for a bit and have lost track about what's going on with the stimulus package. However, I do know that Obama was always and has always been for going "green". I know at first he had indicated that he wanted to "revive" the construction industry by offering more road construction, and infrastructure projects, as some of you have already pointed out. I also remember him saying that he wanted as many government (federal and local) facilities to have "green energy" implemented. Because of this, I'm in the process of taking my LEED AP exam in a couple of months (thankfully I registered to take the current version of the exam before the deadline). In addition, we're doing lots of research in becoming distributors for "green" products. We're about to start building a brand new LEED Certified home (we're targeting either Silver or Gold certification when it's all done) and during the process of finding out about products and such, I realized that not many distributors exist down here in South Florida and very few are in the Southeast overall. It'll all work perfectly; we're building a home that will be LEED certified, we're in the process of obtaining our LEED AP certification, and we may sometime in the near future be selling these products. I think that those who'll qualify to take on "green" projects, and those who sell the products are the ones that will benefit from the stimulus package. This of course is if what I heard about 2 months ago was correct and Congress follows through with this. Prosperous times may be coming to those who are, or who have geared themselves towards the change that this industry is taking.

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Magnettica

Green is great until u see how much it costs. Besides, we only need green becuase global warming is taken over. But global warming is made up crap meant for you to think that we need to go green.

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Michaeljp86

Yes thats what I meant but obama is one of them and hes the one the media is throwing in our faces. Obama is to stupid to be one but they are using him as a puppet.

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Global warming is a myth, like evolution and the metric system.

poole_3

I'm glad I could start such a heated debate. It's good to know there is some fire out there. All the comments were very well received except for the one about global warming being a farse - you really have to wake up, it is the real deal, and we have to do something. But the majority of the problem is coming from China and India. Good luck with them. Thanks for all the responses. John

Warren

Green is such a fad! until it can become viable and sustainable (read; affordable) it will sputter and stall. Green means Green as in dollars.
Sure we will see more twisty light bulbs and better insulation because these things do save money.

Best parts of the stimulus for residential are

1) tax rebate for first time homebuyers. this is a 10 percent credit (up to $8000 ) for homebuyers who live in 1st home for 3 years.
2) Federal reserve pushing interest rates lower. currently a 15 yr/no points can be had for 4.5%
3) 30% (up to $1500) for energy related home improvements.


As far as I can see the rest will be short lived or too far off to help much now.

Jason Whipple

I'm seeing a lot of public work up for bid at schools, town halls, and other government buildings. I don't do most of this type of work, but at least the guys working on those projects won't be moving into renovation work.

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