State by State: Is the Stimulus Bill Creating Construction Jobs?

The American Recovery and Reinvestment Act of 2009 (ARRA) had big plans for the construction industry – $131 billion big.

That stimulus money is supposed to help an industry that is still hemorrhaging jobs today. So far, the ARRA has sent money to all corners of the construction industry, from residential building construction to highway projects to water and sewer line maintenance.

Here is a comparison of the jobs lost in the last year (September 2008 to September 2009) with the number of jobs created or retained by the ARRA.

Recovery.gov recently released their quarterly report on stimulus bill funds and our team at Construction Software Advice has compiled the construction related data to gain a clearer picture of how the ARRA is influencing the construction industry.

The major question surrounding the ARRA and the construction industry on this reporting deadline is: How many construction jobs has the stimulus bill actually created or retained?

We downloaded the state summaries from Recovery.org; sorted the project activity codes by the North American Industry Classification System (NAICS) construction industry definition (23); and compiled those construction project numbers.

According to the data released on October 30th by Recovery.gov, the ARRA has created or saved 73,352 construction jobs across the nation at a total cost of $15.8 billion since the bill was signed into law.

That's $222,107 per construction job.

What effect do those numbers have on overall employment in construction?

Here is a graph of the number of construction workers unemployed each month this year, in thousands.

Unemployment in the construction industry has more than doubled in the last two years and as you can see, the stimulus bill has so far had a negligible effect on construction unemployment. There are over 600,000 more construction workers unemployed right now than there were in 2008.

The verdict so far on the stimulus bill and construction job creation across the country?

Jobs are being created and saved but nowhere near a rate that will allow the stimulus bill to claim victory over construction unemployment.

At the current rate of approximately 8,500 construction jobs created/saved a month nationwide, it would take the stimulus bill by itself 82 months to bring construction unemployment down to 2008 levels.

Even though the ARRA may not be single-handedly saving the construction industry (which wasn't its intent), only about one-third of the stimulus construction money has been disbursed in the form of grants, loans and contracts. With 73,352 jobs created/saved during this reporting period, the number will undoubtedly go up in future months as more projects begin and as more projects enter more labor-intensive phases. The construction jobs created/saved by the stimulus will likely get better before they get worse.

How are individual states doing creating construction jobs with their ARRA money? Some better than others.

The table below shows the total ARRA funds awarded for active construction projects by state; the amount of ARRA construction funds sent so far; construction jobs created/saved by the ARRA; and the cost of each construction job created/saved by ARRA funds.

We acknowledge that there are cost of materials, insurance, bonding, etc. to subtract from overall construction spending but those numbers are not readily available in the federal government's reports on the stimulus spending.