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

by

Market Analyst

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.

Construction Jobs

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.

unemployed construction workers

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.

StateAmount AwardedAmount ReceivedJobs created
Cost per job
AK$559
$117905$129,161
AL$757$4401190$369,982
AR$411$2371006$235,976
AZ$659$1141538$73,957
CA$3,700$2,2004197$535,171
CO$477$3081041$295,621
CT$324$221432$511,053
DC$1,900$1051047$100,493
DE$131$65474$137,924
FL$1,400$571772$32,242
GA$1,000$5991551$386,357
HI$307$99439$226,517
IA$573$1351474$91,617
ID$190$139451$307,707
IL$1,100$8112451$331,066
IN$971$89993$89,407
KS$693$405909$87, 818
KY$647$3261245$261,508
LA$723$4201056$397,895
MA$1,500$3615174$69,831
MD$791$3861520$254,322
ME$233$87707$123,115
MI$960$1402942$47,536
MN$748$4402077$211,734
MO$766$1351436$93,920
MS$582$323930$347,341
MT$397$851298$65,449
NC$1,000$6492310$280,742
ND$376$174560$311,619
NE$331$155923$168,350
NH$221$128284$448,984
NJ$892$5001556$321,326
NM$335$178747$238,919
NV$155$103298$344,987
NY$2,900$8385108$164,101
OH$1,500$4623820$120,908
OK$707$1911390$137,231
OR$398$113650$173,201
PA$1,200$1241937$63,811
RI$195$26441$59,572
SC$810$366941$389,290
SD$326$148569$260,302
TN$994$124991$124,601
TX$2,500$1,3004199$325,891
UT$411$2311417$162,782
VA$700$240754$318,592
VT$170$107358$299,481
WA$751$4111670$246,100
WI$676$1061050$100,901
WV$385$201561$359,103
WY$240$52563$91,980
Total$41 billion $15.8 billion 73,352$222,107 (Avg.)
 
  • http://www.aguanomics.com David Zetland

    Wow — great analysis. I wish the pols would stop protecting “jobs” and start protecting PEOPLE.

  • http://www.osborneink.com Matt Osborne

    The last time you went shopping, how many jobs did you create or maintain? Truthfully, you have no idea because once the money left your hands you don’t know what they did with it. But you can make some guesses: the business paid wages, paid bills, and bought new inventory.

    Any construction project requires materials. Contractors rent equipment. Labor is just one part of the economic activity created by spending. That is the key thing about stimulus: it creates economic activity to spur private investment.

    The two greatest stimulus projects in history were World War II and the Marshall Plan. Both were smashing successes, as I recall, and neither presaged a socialist takeover. Quite the opposite, in fact.

  • http://www.SoftwareAdvice.com Chris Thorman

    @ Matt Osborne

    That’s a fair point Matt. That’s why I put that disclaimer at the end of the post that information like you mentioned was easily available in the Recovery.gov reports.

    Thanks for reading.

  • Andrea Panciera

    Chris, what is your definition of a construction worker?

  • http://www.SoftwareAdvice.com Chris Thorman

    @ Andrea

    Like I mentioned in the post, I compiled the data of all of the projects with a construction NAIC activity code.

  • Blogs by Market:
  • Subscribe to the Software Advice Construction Blog

Popular Blog Posts