Builders press for U.S. investment

Using the installation of the Broadway Bridge as a backdrop, Associated General Contractors of America economist Ken Simonson on Tuesday stressed the need for a federal infrastructure program to help generate more construction jobs in Arkansas and across the U.S.

During a news conference, Simonson said the organization would be supportive of a "properly structured" plan that could help an industry that saw employment decline or stagnate in 135 out of 358 metropolitan statistical areas between October 2015 and October 2016.

The Little Rock metro area, which includes North Little Rock and Conway, ranked No. 4 nationally in the number of construction jobs lost and No. 6 in the percentage of total jobs lost.

Little Rock, according to Bureau of Labor Statistics data cited by Simonson, lost 1,800 jobs, a 10 percent drop.

"There's little doubt that thousands more construction workers would be earning higher wages in Little Rock and around the country if the public sector were investing more in our aging infrastructure," Simonson said. "The good news is there appears to be an emerging bipartisan consensus in Washington in support of enacting a major new infrastructure program early next year."

President-elect Donald Trump has proposed a $1 trillion plan to create more public works projects. Simonson said the contractors association doesn't have a "single preferred plan" but does want to see more projects similar to the replacement of the Broadway Bridge.

A crew of about 120 people is working to replace the 93-year-old bridge at a cost of $98.4 million. Funding for the project is a mix of state and federal money.

Ideally, additional public works projects would not only reduce congestion, but also benefit construction companies, equipment dealers and other retailers, Thomas Dickinson, general manager of McGeorge Contracting in Little Rock, said at the news conference.

"Uncertainty in funding creates havoc for construction companies striving to keep existing employees," Dickinson said.

Public works spending has declined 2.2 percent nationwide during the past 12 months, according to Simonson. During that same time, the construction workforce has declined 5 percent in the Fort Smith metro area, which includes part of eastern Oklahoma, while increasing 4 percent in Northwest Arkansas.

Bureau statistics include mining and logging jobs in the construction employment sector.

Kathy Deck, director of the Center for Business and Economic Research at the Sam M. Walton College of Business at the University of Arkansas at Fayetteville, said the Little Rock area has seen a 14 percent decline in building permits from October 2015 to October 2016.

Public works projects would likely help boost those numbers, she said.

"This isn't endorsing any specific infrastructure plan, but whether we were in the depths of a recession or where we are now -- long past that -- I think the one constant thing is you don't want to stop investing in those types of public works," Deck said. "There is no doubt that fixing infrastructure doesn't just put investments in place that can pay returns over decades, but provide a short-term boost to jobs."

But if the government boosts infrastructure spending, then other federal programs or private industries could see a decline in spending as a result, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.

"Any time you're talking about diverting resources into an activity, yes, you're going to see more economic activity take place," Pakko said. "An economist would always point out there is always an opportunity cost. What could you have done otherwise with those resources? I don't have an answer of what would be better in any sense of the word. ... But there is a trade-off to consider."

Business on 11/30/2016

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