The debate over whether or not the stimulus package is helping the construction industry (and the overall economy) rages on. About 30 minutes ago, the Associated Press (AP) posted an article, SPIN METER: ‘Help Wanted’ Counting Stimulus Jobs, exploring the reality of new jobs.

According to this article, the new jobs created by the stimulus package only last 35 hours or one work week.  Yet, by the state’s accounting, a job is a job whether it last for an hour or a year!

Is a tiny bit of work better than none? Hmmm, not sure about that one.

On the federal level, President Obama says the stimulus package has created 150,000 jobs based on a misused formula. His numbers are murky at best. Sound like the same blurry area we face trying to figure out Google’s new algorithms.

Ten states have launched their own mini stimulus package to create more jobs and nine others have proposed one. This is my favorite quote from the article,

Contractor Deborah Matthews of Pacificmark Construction, based in Milwaukie, Ore., is happy for any work. Her company picked up three contracts for painting, installing a water filter system and refurbishing a maintenance building. Prior to those contracts, which lasted about six weeks, she had laid off nearly all her construction workers. She brought back three full-time and hired a part-time worker.

“It was a little bit,” she said, “to just keep us going.”

I encourage you to read the full article and give your 2 cents. In this economy, is a little bit of work a lot???

According to Bloomberg, construction spending in the US surprisingly rose in April, despite dismal predictions. The 0.8 percent gain was the biggest since August.

- Non-residential construction, including public projects, increased 0.8 percent. Compared with a year earlier, it was up 2.5 percent.

- Public construction decreased 0.6 percent, restrained by declines in the building of schools, water-supply and sewage- treatment plants. Such projects may increase in coming months as funds from the government’s infrastructure stimulus spending filter through to worksites.

- Spending on structures fell at a 42 percent rate in the first quarter, while residential outlays dropped at a 39 percent pace, the government reported last week. The economy shrank at a 5.7 percent rate, after a 6.3 percent decline in the fourth quarter.

National economist, Ken Simonson, said the outlook for the commercial construction industry remains grim through 2010. Simonson is the chief economist for the AGC (Associated General Contractors of America). He addressed industry professionals and members of the AGC of Greater Florida in Tampa.

While he admits the federal stimulus is helping to cushion the blow, there are strings attached to stimulus projects.

- Contractors will be required to pay union wages to workers on projects that are stimulus-funded, even state and local.

- Contractors must purchase American made products for stimulus-funded projects

It is uncertain what these requirements really mean for contractors, as there are gray areas that can be interpreted differently. On the positive side, real estate sales are slowly starting to improve. For the economy to rebound, Simonson says government must fix the housing market and credit system.

You can read the full story in the Tampa Bay Business Journal here.

In a press conference today at Transportation Department in DC, President Obama said the taxpayer-funded effort is working. He said construction projects are being completed on time and under budget. Evidently the $787 billion is doing exactly what it was supposed to do. Read more about it in The Washington Post.

Interestingly enough, today the Arizona Department of Transportation is reporting that even though the stimulus package will generate about 6,000 construction jobs, they have lost about 77,000 jobs in the past year.

“We’re not looking a gift horse in the mouth. All of something is better than all of nothing,” said David Martin, president of the Arizona chapter of the Associated General Contractors. “But there is far more need than what the stimulus package will underwrite.”

You can read the full article here.

In an attempt to win projects funded by the stimulus package, construction companies are bidding low. In Pennsylvania officials are saying that bids for road and bridges have come in 15% lower than expected. Utah says their bids are 25% lower and Louisiana says a bid for work on Interstate 49 came in about $4.7 million less than expected.

There are so many construction companies seeking jobs that companies are willing to make less just to get back to work. The lower bids should help stretch the stimulus dollars and get more bang for the buck.

As of last week, 34 states has been given the green light for nearly 1,00 projects totaling $3.4 billion.

Living in Austin, TX, we’ve seen the construction of many tall towers in our ever-growing downtown district. The skyline is continually expanding, especially in the past few years. The tallest building we have is the 33-story Frost Bank Tower and from the street it looks enormous. I can’t even imagine how immensely tall the Chicago Spire would look - it’s supposed to be a 150-story tower! Unfortunately, the credit crisis has stalled construction of this incredible “twisting” tower, the tallest  in the Western Hemisphere.

They’ve already dug a 76-foot-deep hole and sunk caissons. And why not? Buyers have purchased a third of the 1,124 luxury condos between $750k and $40 million. (Ty Warner, Beanie Baby creator, has the penthouse.) Instead of being a beacon of luxury, the unbuilt sight is starting to become a constant reminder of the economic downturn.

Globally work has been halted on 11% of the world’s skyscraper projects. Dubai, Russia and Chile are some of the countries that have had to stop construction on other “Babel” type projects.

Read the full article on Reuters.

Yesterday MSNBC reported Mississippi is seeing construction dollars like $205 million for construction at the Yazoo City Federal Prison, $61 million for construction of Mississippi River levees and $20.8 million to construct mooring cells for barges along the Tennessee-Tombigbee waterway.

This money is actually separate from the federal stimulus package that is expected to bring $2.8 billion to the state.

Remember, with all government funded projects certified payroll becomes critically important. Generic accounting software does not have these capabilities. AccuBuild’s Payroll Module handles union reporting, certified payroll and multi-state processing.  You can choose pay methods, set user-defined deductions and automatically calculate employer burdens. If you’re looking to grow your business and take on big government projects, make sure you’re prepared to do it the right way.

I’m still on the topic of economics today. How can we ignore the $28 billion that is being spent on building highways? President Obama claims this money will create 150,000 new jobs by end of 2009. Here are some excerpts from the Associated Press article.

“Transportation projects that were once on hold are now starting up again as part of the largest new investment in America’s infrastructure since President Eisenhower built the interstate highway system,” Obama said.

The president referred to it as a “21st century infrastructure.”

You can read why I think the stimulus plan and bonding go hand-in-hand here. Get more construction stats here.

The buzz in the construction industry these days is all about the stimulus package. From the small companies struggling to survive to the larger corporations that continue to thrive, they all want a piece of the pie.

Recent news:

MSN - $1 Billions in DHS Headquarters Coffers
MSN - Officials Meet to Discuss Stimulus Spending in S. Florida
USA Today - Airports Benefiting from Economic Stimulus
ACP - Missouri Steel Bridge Kicks Off Infrastructure Stimulus Program

Obviously none of us are shocked to see lots of work in the public sector - infrastructure, schools, local government projects, etc. But just because the funds are going to be there doesn’t mean any contractor can get these projects.

Contractors usually have to be pre-qualified to bid these kind of projects and must have the proper bonding capacity to win such projects. If a contractor that has not previously done public works wants to get into the picture, they must first take the appropriate steps to make sure they are eligible.

Bonding capacity is not the only requirement, but it is usually the deal breaker for many. A surety bond gives the government or local agency an insurance policy that the contractor who is building the project will finish the work and if they are not capable the surety or insurance company will step in and make sure its finished.

One way to increase your bonding capacity is by implementing construction specific software, giving sureties and insurance companies the reports they need to issue a contractor a bond.

Want to learn more? Here are 5 tips for increasing your bond capacity.