Stimulus A jobs generator

January 11, 2009
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As members of Congress and President-Elect Barack Obama try to hammer out an economic stimulus package that may reach $800 billion and include money for infrastructure improvements, the Associated General Contractors of America has estimated what each billion dollar that Michigan receives for nonresidential construction would mean for the state.

The AGC report said every additional $1 billion spent in Michigan on roads, bridges, sewers and water systems would add roughly $2.3 billion to the state’s Gross Domestic Product and about $754 million to personal earnings, and would create or sustain 20,000 jobs.

Of those jobs, AGC said 6,800 would be on-site construction jobs in Michigan and 3,200 would be direct and indirect jobs associated with construction materials and services. Most of the supply and materials jobs would be located in the state, but AGC said some would be outside of Michigan.

Another 10,000 jobs would result from the spending by construction companies and suppliers. AGC said these jobs would be based in Michigan and spread throughout the state’s economy.

“Investing in infrastructure will create jobs, will increase savings and will stimulate economic growth,” said AGC CEO Stephen Sandherr. “As important, these investments will give our (national) economy a global competitive edge for decades to come,” he added.

Other highlights of the AGC report were:

  • Nonresidential construction spending in Michigan totaled about $14.6 billion in 2007 and supported 297,000 jobs that year.

  • Direct construction spending in Michigan contributed a total of $33.7 billion in 2007 or 8.8 percent to the state’s GDP of $382 billion.

  • Michigan’s construction industry, including residential, employed 147,000 workers last October, a figure that was down 65,600 jobs from the industry’s peak month of June 2000.

  • The 2007 annual pay of all construction workers in Michigan averaged $49,000 or 13.5 percent more than the average for all private sector employees.

  • Michigan had 25,000 construction firms in 2006 and 94 percent of those companies employed fewer than 20 workers.

AGC Chief Economist Ken Simonson and George Mason University Professor Stephen Fuller prepared the report using data from the U.S. Department of Labor, Bureau of Labor Statistics; the U.S. Department of Commerce, Bureau of Economic Analysis; and the U.S. Census Bureau. AGC has its headquarters in Arlington, Virginia.

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