Federal construction funds delayed until late '09

February 01, 2009 |

President Obama's $825 billion economic stimulus plan includes $51 billion for nonresidential buildings and multifamily housing construction in 2009–10, according to preliminary details announced by the House Appropriations Committee.

This plan would provide a 4% boost in construction work in both years, allowing for a 20% leakage to pre-start, off-site expenses and to post-completion furnishings. A 4% boost in 2009 would keep inflation-adjusted construction spending about steady throughout the year, according to BD+C, which assumed a much smaller impact from the economic stimulus plan.

It's too soon to know when—or if—the $51 billion plan will be approved. The first promised date was January 20th; March now appears feasible. But job site spending will not reach the $2 billion-per-month level until well into the summer, at the earliest, which puts the maximum 2009 impact at a 2% boost to job site construction spending. Realistically, the boost will be considerably less. The major impact will be in 2010 with a significant boost continuing into 2011.

The project list is not as "shovel ready" as advertised, however. The largest item, $20 billion for K-12 and university buildings, is clearly an allocation to education rather than a summary of specific projects. The usual Congressional bargaining over whose district gets what money has yet to take place (and past bargaining has taken many months). The $15.1 billion for energy-efficiency improvements to public buildings appears to be in the same category. Some smaller items appear to be specific projects, such as $300 million for a National Institute of Standards and Technology laboratory and $150 million for renovations at the Smithsonian Institution in Washington. However, much of the $18 billion for government building projects (plus the funding for government civil projects) has to be designed by the Corps of Engineers, which is already behind schedule calling for bids on the record level of work it already has.

A breakdown of the House Appropriations Committee's $51 billion in allocations for nonresidential buildings and multifamily housing construction is posted at: www.BDCnetwork.com/article/ca6632642.html.

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