Use the stimulus to sell industry products

March 1, 2009
This is going to be a tough year for contractors, but now that the money and tax breaks are available, it's up to us to use them to sell the industry's products.

Last December, workers at a Republic Windows factory near downtown Chicago occupied the plant for several days after they were informed that they were losing their jobs immediately and the plant was closing. The workers staged the sit-in because the company had violated Federal law that said a plant that large, 260 workers, is required to give either 60 days notice of a closing or 60 days pay. The workers got paid.

Now there's good news that those workers may be getting their jobs back because a California company, Serious Materials, is buying the factory in order to manufacture energy-efficient windows.

The news follows the passage of the President's stimulus package. reported that, “There is a ‘very direct’ correlation between the stimulus package and Serious Materials' ability to reopen the plant, said Sandra Vaughan, chief marketing officer for the California-based company.”

Regardless of one's politics, it seems like every trade association in the construction industry sent out a press release after the stimulus package was passed, saying that there was dough in there somewhere for its members. As Associate Editor Candace Roulo explains in her page 1 news story in this issue, there are billions of dollars available for construction and green energy- and water-conservation projects, either in the form of direct spending or tax breaks. Not a moment too soon. The Commerce Department reported that construction spending fell 3.3% in January.

The more than $135 billion in construction and infrastructure investments included in stimulus legislation being signed into law will create or save nearly 2 million jobs over the next two years, the Associated General Contractors of America concluded in its final analysis of the legislation.

The analysis, conducted by the association's chief economist, Ken Simonson, concluded that the infrastructure and construction funding would create or save 650,000 construction jobs and 300,000 positions in related fields such as equipment and material supply. An additional 970,000 jobs in the broader economy would also be created or supported by the investments.

“There's no doubt the stimulus will have a positive impact for construction businesses and their workers across the country,” said Stephen Sandherr, chief executive officer of the Associated General Contractors of America. “When you get beyond the politics and the policy, the fact remains these investments will put people to work, save businesses, and help rebuild aging infrastructure.”

In addition to estimating the number of jobs to be created by the construction funding, the association also calculated the benefits to personal earnings and gross domestic product. Simonson noted that the $135 billion for construction would increase personal earnings nationwide by $75 billion and add $230 billion to GDP.

The following projects and research will be funded through The American Recovery and Reinvestment Act of 2009: facility sustainment, restoration and modernization projects using energy efficient products, $4.2 billion; improve energy efficiency in aging public housing, $4 billion; energy retrofitting and investing in green projects in HUD-assisted housing, $250 million; increase energy efficiency using green technology in federal buildings, $4.5 billion; energy efficiency and conservation grants, $6.3 billion; energy efficiency and renewable energy research, $2.5 billion; and new loan guarantees for renewable projects, including wind or solar projects and electricity transmission projects, $6 billion.

Because of the investment in infrastructure and energy, heating and cooling systems will be upgraded in government buildings and schools. States will receive $9.75 billion to modernize and renovate schools' heating and cooling systems.

Homeowners will receive a 30% tax credit (a $1,500 limit) for the installation of qualified energy efficient water heaters, furnaces, boilers, air source heat pumps and central air conditioners in 2009 and 2010. Ninety-five percent AFUE gas furnaces; 90% AFUE oil and gas furnaces and gas, propane, or oil-fired boilers; 16 SEER/13 EER and greater central air conditioners; 15 SEER/12.5 EER/8.5 HSPF split heat pumps; and 0.82 energy factor/90% thermal efficiency gas, propane, or oil water heaters will qualify for this tax credit.

This is going to be a tough year for contractors, but now that the money and tax breaks are available, it's up to us to use them to sell the industry's products.

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