Florida hard hats to Washington pols: Stimulate us

Florida's construction industry has idled 156,000 workers since real estate peaked in July 2006. The industry's biggest trade group, the Associated General Contractors of America, wants to bring thousands of those employees back into the workforce, courtesy of the federal government.

As it lobbies for a stimulus package from Washington, the trade group reports that an extra $1-billion in construction spending in Florida would "create or sustain" 23,000 jobs and add $748-million to the state payroll. And it's making dire predictions if it doesn't get its way:

An estimated two-thirds of the nation’s non-residential construction companies are planning to cut their payrolls, according to new employment and business forecast figures released today by the Associated General Contractors of America.  All told, those layoffs are forecast to result in a 30 percent decline in the number of people working on construction projects.

“Unless the business climate changes significantly and soon, the construction sector will continue to experience the kind of devastating job losses and crippling declines in business activity that will undermine efforts to end the recession,” Stephen Sandherr, the association’s chief executive officer said.

During a conference call Thursday, the AGC urged the government to start disgorging money for infrastructure improvements, estimating that the states have $64-billion worth of road and bridge projects "shovel ready."

AGC counted 501,000 Floridians engaged in construction related work in October 2008, a decrease of 23.8% from the 2006 peak.

Admittedly, the 23,000 jobs forecast is a bit of a myth: The trade group said only 7,800 of the positions would be on‐site construction jobs in Florida. Another 3,700 would be tied to building supply companies and related industries. Not all of those jobs would be in state.

The bulk of the jobs, however, are indirect spin offs created whenever a construction worker spends his cash. It could be anything from the Publix clerk bagging his groceries to the bar tender slinging his drinks after hours.

Despite the sleight of hand on the jobs count, Florida needs money to jump start the bulldozers. Our population growth through the middle of last year was just 0.7 percent. This compares to the national average of 0.9 percent.

Remember when the inflow of new residents into Florida shamed most of the other states? Where's Mickey Mouse when you need him?

Comments

[Fuzzy Bear]

Where's Mickey Mouse when you need him?

Mickey was evicted from his house due to foreclosure as he failed to realize his $20,000 a year income could not support his $300,000 mortgage payment.

[Fuzzy Bear]

In the past, I have mentioned the "hidden inventory" or shadow market of home waiting to be sold at a later date when the market improves.

The following article from Bloomberg explains the impact of the "hidden market and it most certainly will have a significant negative impact on the jobs in the Florida market.

“As the U.S. housing recession enters its fourth year, there’s no sign of a recovery because speculators account for most of the rise in sales. While the purchases are trimming the inventory of unsold properties, most of those bought by speculators will likely return to the market when prices rise again, hampering any recovery, said Nobel laureate economist Joseph Stiglitz and Yale University Professor Robert Shiller in interviews.”

“‘We’re creating a shadow inventory of homes that will be right back on the market as soon as the economy and the housing market begin to improve,” said Stiglitz. ‘We could see a double-dip in the housing recession if that happens.’”

“‘You don’t have it in strong hands, you have flippers,’ said Shiller. ‘These speculators are preventing the market from crashing now, and when they get out it could fall again.’”

[Tino]

Let me get this straight. There are decent middle- and upper-class communities where 10% or more of the properties are vacant, for sale or being foreclosed on.

Solution: keep building!

[James Thorner]

Fuzzy, That's a good point. But I've been happy to see that two recent resales on my street were to end users, i.e. homesteading families. One moved here from out of state. The other had been renting a house down the street and grabbed a short sale for $100,000 below what I paid in 2006. I know investors have been snooping around, but their lowball offers were rejected by the banks.

[sam]

I just purchased a house I will live in from an investor for $90k less than what he paid cash for in 2006. I was renting previously. The house just appraised for $35k more than I paid. I plan to live there for at least the next 5 years.