Construction industry hopes for a rebound

The construction industry, which has experienced drastic drops in unemployment during the current economic downturn, is hoping for some recovery under Barack Obama's expected stimulus package, according to The Wall Street Journal.

In anticipation of a surge in public-works spending, investors recently bid up construction and engineering stocks, with share prices increasing an average of 16 percent for engineering firms Nov. 24.

The construction industry had the highest unemployment rate of all employment sectors—10.8 percent—in October. Stephen Sandherr, chief executive of the Associated General Contractors of America, says a stimulus plan could "absolutely change the scenario for companies that have been talking about laying people off."

Schools and governments have been postponing approved construction projects, and assured funding could help jump-start these projects. The American Association of State Highway and Transportation Officials has a list of 3,109 approved highway projects that have not yet begun. Officials handling transportation issues for the Obama transition have prepared state and local officials for a spending package.

"What we've been told is to be ready, it's coming," says Christopher Ward, executive director of the bistate Port Authority of New York and New Jersey, whose planned project for a new rail tunnel reportedly would create 6,000 jobs. "Clearly, we have the construction capacity to get shovels in the ground."

Robert Murray, vice president of economic affairs at McGraw-Hill Construction, New York, says critics believe the economy will be coming out of a recession by the time the stimulus packages are passed and implemented. However, he says they still could be advantageous.

"Given the prolonged slowdown expected in 2009, if this package passes early next year, it has potential to be helpful," Murray says.

Date : 12/1/2008