Contractors wait for U.S. stimulus to create jobs

WASHINGTON Thu Jul 30, 2009 5:36pm EDT

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WASHINGTON (Reuters) - Conditions in the U.S. construction industry have improved since President Barack Obama signed the economic stimulus plan into law in February, but employment in the battered sector needs more help, an industry trade group said on Thursday.

A survey of 900 construction and construction-related companies found just 22 percent had won stimulus-funded contracts, the Associated General Contractors said.

More than a third of those plan to hire new employees or rehire workers they had laid off. Nearly 60 percent said they had been able to retain positions because of the work.

"Based on these results, it is clear that while the stimulus is having an impact on the industry's ability to save or retain jobs, it does not yet appear to have much impact on companies' ability to hire additional workers," the group's CEO, Stephen Sandherr, told a conference call with reporters.

Those that had been able to save jobs said the retained employees represent 16.7 percent of their work force.

Some 42 percent of the respondents said they still hope to win contracts for stimulus projects.

Transportation projects are providing most of the work Sandherr said, noting that states had identified so-called "shovel-ready" road and highway projects that could be started immediately early in the process of formulating the stimulus.

Other agencies, though, are slow to distribute funds for construction work. Only half of 1 percent of the $6 billion in stimulus funds available for the Environmental Protection Agency's water programs have been obligated, said Sandherr.

A report from the House of Representatives Transportation and Infrastructure committee released earlier this week found that the bulk of 49,377 jobs created by infrastructure elements in the stimulus plan were in highway repairs.

"With construction unemployment at 17.4 percent, almost double the national rate, it is disappointing to see so many of these programs getting off to such a slow start," he said.

The survey found that most of those involved in a stimulus project expect the work to last less than one year.

The $875 billion American Recovery and Reinvestment Act includes $48 billion for transportation programs and the trade group estimates that more than $100 billion from the entire package will go to construction work.

Obama and the U.S. Congress drafted the plan to help the economy recover from recession and put Americans, especially construction workers who were some of the first victims of the housing market downturn, back to work.

But as the country's unemployment rate nears 10 percent, some are wondering if it has had any effect.

"I see the stimulus as a strong swimmer swimming against a very strong current," AGC Chief Economist Ken Simonson told the call.

The group is suggesting the federal government grow its ranks of officers responsible for awarding contracts to help move the money faster. It is also hoping the government will take further steps to improve the economy.

"The stimulus will keep our industry alive, but it will not turn around the $1 trillion construction industry over night," he said.

(Reporting by Lisa Lambert; Editing by Diane Craft)

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