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Top Construction Economist Says Story on Stimulus-Funded Highway Work “Flawed”

Jan 12, 2010 9:01 AM

In response to a recent Associated Press story exploring the impact of stimulus-funded highway projects on overall construction employment, Ken Simonson, chief economist for the Associated General Contractors of America, issued the following statement:

“While highway construction plays a significant role in shaping the nation’s economic fortunes, it only accounts for 5% of the total domestic construction workforce. And because of declines in the amount of state and local funds invested in road work in 2009, the roughly $20 billion in federal stimulus highway funds obligated in 2009 only contributed to a $4 billion net increase in highway construction activity last year. Meanwhile, total construction spending declined by $137 billion between November 2008 and 2009 to a six-year low of $900 billion.

“As we cautioned the story’s two authors in advance, the fundamental assumptions in today’s Associated Press story are flawed. It is virtually impossible to measure the impact of $4 billion by looking at overall employment figures for an industry experiencing a $137 billion drop in activity — especially when only one in 20 construction workers stand to benefit from those stimulus funds.”

Source: The Associated General Contractors of America

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