Wednesday, May 2, 2012

Construction Businesses Not Stimulated? – Here’s Why

The 2009 “stimulus” legislation was touted as putting over $787 billion into the American economy over its duration, mostly through “shovel ready” infrastructure construction projects. Yet, in terms of economic activity and employment both, the construction industry lags significantly behind the overall economy three years after the measure was signed into law. What happened?

Funny math of government is what happened. Almost all of the “stimulus” appropriations represented money the federal government would have spent anyway, and subsequent cuts in federal construction programs have resulted in overall reductions in the amount of money federal agencies have spent on construction in the intervening years, compared to past spending levels. Remember, it’s Congress, not the president, which holds the purse strings.

Plans for federal government agency spending on construction in 2013, stimulus included, total about $709 billion, a 7.8% reduction from 2012 levels. Add in anticipated but as yet unplanned for emergency response spending, and the fiscal 2013 level may rise to as much as $712 billion, still a 7.4% reduction from the year before. What Congress gave with the left hand in 2009 it more than took away with the right hand in subsequent years. Go figure.

blog comments powered by Disqus