Construction industry unemployment has passed 19%.

In FEBRUARY, I speculated on the legislation that was winding its way through Congress

and the administration. That bill has ultimately become our own version of the New Deal. Dubbed the American Recovery and Reinvestment Act, its name far less inspiring than FDR’s moniker for his famous program that kick-started the recovery in the 1930s.

We know far more now than we did in February. And with previous speculation of double-digit unemployment by next year appearing to become true, I am still betting that the value of the stimulus package will eventually exceed the $787 billion face amount.

For the construction industry, the unemployment picture is even more dire. Even after the stimulus creates the expected 700,000 construction jobs, there will still be more than 1.2 million construction workers unemployed, recalling Depression-level job losses.

The industry lost another 126,000 jobs in March, bringing the total construction job losses to 466,000 since November. The construction industry’s unemployment rate in April was 19.7%, compared to 11.3% a year earlier.

Spending this kind of money in a short time to achieve the intended impact is a daunting task, however, and deploying the $130 billion construction-related portion is proving to be challenging.

The first out of the gate is the Department of Transportation, which obligated $4.7 billion in just the first two months after passage, with almost all of it going to state highways. A critical factor is the bill’s stringent “use it or lose it” provision, requiring states to obligate half of their highway dollars within 120 days of DOTs apportioning the funds. This has state highway officials racing to get shovels into the ground.

Other agencies, such as the General Services Administration and Department of Veterans Affairs, recently released lists of projects, but these are still in the pipeline. The Department of Defense weighed in with its own $5.9 billion, comprised mostly of small projects sprinkled throughout the country.

The Army Corps of Engineers’ plan was expected to be released this spring. For us in the Gulf Coast region recovering from Hurricane Katrina, it is expected to be a gargantuan additional investment we sorely need.

But capitalizing on the stimulus package is complicated. Some requirements apply across the board, but funding allotments differ from agency to agency, as do some mandates and deadlines. Federal agencies are trying to sort through the various directives from the Office of Management and Budget and federal procurement officials.

Buying American

One hurdle that has slowed implementation is the Buy American provision, which requires stimulus-funded projects to use only “iron, steel and manufactured goods…produced in the U.S.”

That language has delayed some projects, causing the EPA to issue a nationwide Buy American waiver for drinking water and wastewater treatment projects. Fortunately, this statute allows federal agencies to waive the mandate on several grounds, including “the public interest.”

In this case, the EPA found that its contractors could not readily find American-made equipment for these projects in a suitable time frame. Imposing the Buy American requirement “would entail time-consuming delay, and thus displace the ‘shovel ready’ status of these projects,” the agency said.

Much has been debated in diners and coffee shops around America about the prudence of spending this kind of money. But when we travel and visit concrete producers, everyone says they can’t wait for its impact to flow through their communities and states.

Pierre Villere is President and Managing Partner of Allen-Villere Partners. Contact Pierre Villere at or telephone 985-727-4310.

© 2009 Hanley Wood, LLC. All Rights Reserved. Republication or dissemination of “Revisiting the Stimulu ” (The Concrete Producer, May 2009) is expressly prohibited without the written permission of Hanley Wood, LLC. Unauthorized use is prohibited. Allen-Villere is publishing “Revisiting the Stimulus” under license from Hanley Wood, LLC.