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• • Montana contractors feel stimulus funds slowing down
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  • Montana contractors feel stimulus funds slowing down

More than $300-million dollars in federal funds has poured into Montana since the American Recovery & Reinvestment Act of 2009 was passed. But those funds are now running out, which could have a big impact on the construction industry.

The Montana Contractors Association estimates that its members have 90% of the stimulus work across the state, and that work is running out and construction unemployment is sitting at 22%.

Cary Hegreberg, executive director of the association, noted, "It's been a God-send to our industry to have these federal funds pouring into Montana."

Hegreberg continued, "These stimulus funds really have been buoying the market. We are concerned, we are fearful about what is going to happen to our industry when the federal funds run out, because we are not seeing private investment step up and filling that gap."

Helena Sand and Gravel had about $5-million dollars in stimulus projects last year, and now those projects are gone and work is declining.

Scott Olsen, vice-president of the company, said, "The work that is out there, we are seeing a lot more bidders, a lot more contractors that are looking for that work. We are all after the same amount of work and so it's definitely tougher to pick those projects up."

Typically, Helena Sand and Gravel has jobs lined up eight months in advance; currently its backlog is only four months. They also are now competing with out-of-town and out-of-state business for local work.

Hegreberg said, "There is just a host of things that come along with the construction economy that stimulate the economy, that was the goal of the stimulus program, and it remains to be seen just how effective it's going to be in actually generating private-sector investments. Right now we'd have to say that some of that isn't coming into fruition yet."

Which could leave heavy equipment sitting idle. And for contractors who are paying taxes on the machinery, it may even mean liquidation.

Helena Sand and Gravel reports it has not laid off any employees during these tough times, but has cut back on some of their hours.