No! Don’t Get Sick…

Site-k Editorial Staff

For the past two years you’ve heard me bellyache about the economy and the country’s failure to pass a new Highway Trust Fund Bill.  Well, here we go again, more “crabbin’” about what we don’t have and what we didn’t do but before you decide to use this article to line the bottom of the kitty-litter pan (that’s one of the advantages of our large format) read it. It’ll make me feel better and encourage the publisher to keep me around.

A few days ago Associated Builders and Contractors (ABC) had an on-line news conference. It was very well done but it didn’t put a smile on my face. If you’re interested in seeing and hearing it, here’s the web link:

http://eventcenter.commpartners.com/se/Meetings/Playback.aspx?meeting.id=108788

Following the conference ABC released the following information about the hour-long webinar:

“Associated Builders and Contractors (ABC) Chief Economist Anirban Basu said that the nation’s construction industry recovery may be two years away.

“From what we’ve seen so far in 2011, nonresidential construction will likely be further delayed,” said Basu. “Right now, what will happen in 2012 remains unclear.

“Officially, the country is in a period of economic recovery,” Basu said. “Unfortunately, this does not mean that all segments of the economy are doing well. No sector of the economy has been hit harder than the construction industry.

“Employment in the construction industry has expanded over the past four months,” said Basu. However, I do not expect significant construction employment in the months ahead. The economy has hit a soft spot and the construction job picture is flat.

“Segments of the construction industry that will likely experience growth in the coming 10 to 12 months will be healthcare, which is the construction of hospitals, health centers and clinics, and the natural resources sector, which is in reaction to the growing cost of energy,” Basu said.

“Basu was joined by National Association of Homebuilders’ Chief Economist David Crowe and American Institute of Architects’ Chief Economist Kermit Baker.”

One obvious factor permeated the comments of all three economists – the lack of jobs

Our lack of strong serious economic growth boils down to one major factor… jobs… unless people are working recovery is only a figment of the imagination. People can’t buy if they don’t have income. This is where the welfare and or government handout components fall apart. People on welfare or without jobs can’t get credit so they can’t buy houses, cars, high-end TVs, appliances and all the other goodies that create jobs and had “the American way of life”.

Our standard of living has shifted and is transitioning.

It’s summer and the unemployment numbers are going up not down and typically it’s the reverse but right now two critical factors are in play: government unemployment is beyond double digits due to a lack of tax revenue and construction unemployment is still the highest non-governmental sector.

If the government had listened when the highway trust fund bill was proposed 2 years ago the economy would be in a recovery mode with construction unemployment down to 7 to 8% (my guesstimate)… bottom line, no jobs no growth…

One of the questions I asked during the Q & A following the presentations was: “When do you expect overall unemployment numbers to be back down to the 6 to 7 percent level?”

ABC’s Basu responded, “2016. It will be 2016 before it’s down to that level.”

The following statement from Senator Baucus states just how important the Highway Bill is to the job market:

“Hearing Statement of Senator Max Baucus (D-Mont.) Regarding 21st Century Infrastructure Funding (As prepared for delivery)

http://finance.senate.gov/imo/media/doc/051711mb.pdf

“In speaking about the interstate highway system, President Dwight Eisenhower said, “…Its impact on the American economy – the jobs it would produce in manufacturing and construction, the rural areas it would open up – was beyond calculation.”

Infrastructure moves our country forward. It doesn’t just move our buses, planes and trains. Infrastructure also moves our economy.

“Building bridges, roads and railways creates jobs. According to the Federal Highway Association, every billion invested in infrastructure creates nearly 28,000 jobs, and a more efficient transportation system cuts costs for the businesses that help our economy grow.

But over the last several decades, our investment in transportation infrastructure has slowed significantly. Our highways, railways and roads haven’t kept up with our growing population, and our existing infrastructure is falling apart.

“The American Society of Civil Engineers gave the U.S. an overall grade of “D” on their Report Card for America’s Infrastructure.

“Experts estimate that roadway conditions contribute to more than half of all car crashes, and we all remember the tragedy in Minnesota in August 2007. The Interstate 35 West Bridge in Minneapolis collapsed, killing 13 people and injuring another 145. Ensuring quality infrastructure is a safety issue we must take seriously.”

Do the math. If we put $50 billion into infrastructure it would equate to 1,400,000 jobs. How much was the stimulus fund? In order for this investment to work it has to be guaranteed for a specified period of time. In the case of the Highway Bill it has been on a six-year basis.

Why?

Contractors, manufacturers, city, county and states highway officials won’t make long term commitments unless there is a long-term guarantee that projects will get the necessary financial support to reach fruition.

Taking 1,400,000 jobs out of unemployment could make a serious difference.

What can you do?

Be a citizen. Demand that your representatives get to work on the Highway Bill that comes up for renewal again, at the end of September, this year. Tell then you don’t want another extension; you want a new six-year bill. Another extension is like expecting a skid steer loader to load a 400-ton off highway haul truck. It simply won’t work.

If you don’t know how to contact your Senators or Representatives Send me an e-mail and I will get the information for you. If you need help with putting an e-mail together, send me an e-mail and I’ll draught on for you. Contact you local and/or national trade associations and ask them. They’ll be eager to help.

My e-mail address: greg.sitek@comcast.net or gsitek@acppubs.com.

This article appeared as the editorial in the July 2011 issues of the ACP magazines:  California Builder & Engineer, Construction, Construction Digest, Construction News, Constructioneer, Dixie Contractor, Michigan Contractor & Builder, Midwest Contractor, New England Construction, Pacific Builder & Engineer, Rocky Mountain Construction, Texas Contractor, Western Builder.

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