For those in the construction industry, the Great Recession wasn't a recession at all, but a depression that hasn't ended.
The industry's unemployment rate has reached 25 percent, which is nearly triple the overall U.S. jobless rate.
Enacted more than a year ago, the stimulus package was supposed to prevent this from happening, or so many people thought.
But in the year since President Obama signed the $787 billion American Recovery and Reinvestment Act into law in February of 2009, construction's employment outlook has gone from dismal to devastated.
Back then, the industry's nationwide jobless rate was an already sky-high 18 percent. With joblessness now hitting one-in-four construction workers, the industry's current unemployment rate easily surpasses those of the prior recessions of the last 30 years.
"I've had more friends go out of business in this last year than I've had in a long, long time," said Joseph Troya, vice president of California-based Consolidated Contracting Services, No. 98 on Hispanic Business magazine's annual list of the nation's 500 largest Hispanic-owned companies.
So has the stimulus failed the construction industry?
Industry analysts say not at all. It's just that the plunge has been astonishingly steep, so much so that most experts doubt the construction industry will ever fully recover.
"We are anticipating a return to normal within the next three or four years, but the new normal is going to be substantially down from where the old was," Bill Davis, executive vice president of the Southern California Contractors Association, told HispanicBusiness magazine.
Ken Simonson, chief economist with the Associated General Contractors of America, said the stimulus has been "extremely helpful."
"But it just can't be expected to overcome the tremendous drag on state and local construction spending," he told Hispanic Business magazine.
While the stimulus has been a boon, certain aspects of it have been deficient, Mr. Simonson said. Chief among them is the surprisingly slow rate at which the money has trickled into the pockets of contractors.
The $787 billion stimulus package included about $135 billion for the construction industry. It's by far the biggest infusion of government cash into the trade. But to date, only a fraction of the $135 billion -- no more than $20 billion -- has actually been spent.
Meanwhile, the recession has claimed about 2.1 million construction jobs, and the stimulus package has created or saved a "few hundred thousand," said Mr. Simonson.
The largest share of these jobs was created from highway-related projects -- the fastest construction category to put boots on the ground.
The disappointingly slow spending in the other construction segments such as high-speed rail and the smart grid -- didn't exist before, Simonson said. They've thus been virtually invented from scratch.
But poor planning and bad policies are also to blame, he said. For instance, the federal General Services Administration -- which is spearheading the renovation of federal buildings and courthouses -- suffered from an "embarrassment of riches," in which it didn't have enough staff to distribute its $5.5 billion in stimulus money in a timely fashion.
Another little-known culprit is the Recovery Act's "Buy American" clause, which prohibits stimulus money from being spent in other countries unless waivers are obtained. This has blocked U.S. construction projects -- such as $7.4 billion worth of water and wastewater treatment upgrades -- in which parts can only be manufactured outside the country.
Most Popular Stories
- Ex-Mobster to Bulger: Just Say Sorry
- Google Stock Split Ahead
- Guns Are Hot in California
- OSH Selling Most of Its Stores to Lowe's
- Honda Says Sorry About the Lack of Electric Fits
- MillerCoors Taps New Hispanic Ad Agency
- El Paso Symposium Offers Help to Startups
- First Person Cured of AIDS Virus Wants to Help Others
- Small Businesses Hiring, but Worry About Expense
- LULAC Convention Starts With Focus on LGBT Youth