October 20, 2009

Military construction gets U.S. stimulus boost

WASHINGTON, D.C.

Businesses in the south and southwest U.S. benefited most from the first federal contracts awarded under the U.S. stimulus program, according to initial data released by a government oversight board.

Military construction and environmental cleanup contributed to a boost of about 30,000 jobs.

The new job numbers — in line with expectations for such an early accounting — offer the first hard data on effects of the $787 billion stimulus program.

The figures, released Oct. 15, are based on jobs linked to less than US$16 billion in federal contracts and represent just a sliver of the total stimulus package. But they also represent a milestone of sorts for an administration that promised unprecedented real-time data on whether the program was working.

Until now, the White House has relied on economic models to argue that the program created jobs and eased the recession. The numbers help shift the discussion from whether the program is creating jobs to whether it is creating enough to justify its enormous price tag.

“These are the most thankful employees you’ll ever want to see,” said Robert Del Riego, majority owner of Frederick, Md.-based Re-Engineered Business Solutions, who said he hired 33 new employees, mostly skilled labourers looking for work in the dismal construction market.

He expects to hire six more to help with water and sewer projects in Arkansas and North Carolina and small construction jobs at other sites. His company won US$1.9 million in Army Corps of Engineers contracts.

“It’s extra work, and with work, hopefully you make a profit,” he said. “But the main thing is, it’s putting real guys back to work.”

The White House said the new numbers were validation that the administration was on track to hit Obama’s goal of creating or saving 3.5 million jobs by the end of next year.

The construction industry showed the strongest numbers in the s report, accounting for about a third of the jobs thanks to contracts to repair military bases. Despite those gains, unemployment in the construction industry remains high, at 17.1 per cent. That’s down from its February high of 21.4 per cent.

“It’s kind of carrying us, allowing us to retain employees until the economy makes a rebound,” said Matt Rathsack, director of operations at the Kentucky engineering firm, TetraTech, which reported saving 71 jobs thanks to an Army Corps of Engineers construction project at the Detroit Arsenal facility in Michigan.

“We’ve already pared back and cut back. The staff is on reduced hours. The feeling is we’re coming around the corner. We’re optimistic.”

Environmental jobs also provided a big boost. CH2M Hill, the contractor in charge of cleaning the nation’s most contaminated nuclear site, said nearly 2,200 jobs, from carpenters to engineers to secretaries, had been created in southwest Washington state.

Associated Press

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