Construction boost seen curbing unemployment

JOB GROWTH: In the mid-2000s, Rhode Island’s construction employment increased faster than the national average, but is now similar to the nation and region.
JOB GROWTH: In the mid-2000s, Rhode Island’s construction employment increased faster than the national average, but is now similar to the nation and region.

Three years ago, the Rhode Island chapter of the Associated Builders and Contractors Inc. spent nine months getting permit approvals for a small, $30,000 office renovation in Pawtucket that its president says should have taken a month.
Today, the land-use permitting process in Rhode Island is still stymied by a time-consuming approval process that ABC President Robert J. Boisselle and builder Bob Baldwin, president of R.B. Homes Inc. in Lincoln, say could be streamlined with e-permitting, an electronic mode in use in Michigan and Virginia.
That’s just one of the next steps members of the Rhode Island construction industry would like to see pursued here to improve the construction climate and help attract businesses and residents to the state, following last week’s release of a report documenting the local industry’s economic value.
Intended to jump-start a statewide dialogue about ways to enhance the construction industry’s contribution to the economy, the study by economist Edinaldo Tebaldi, a Bryant University associate professor of economics, finds that a boost in construction employment would also cause the state unemployment rate to drop 1.4 percentage points from its current level, to 7.3 percent.
“This study is extremely valuable to the construction industry as a whole to prove our point,” Baldwin said. “The industry is a highly relevant one and a main economic engine that the state needs to turn back on.”
According to the report, the construction industry supported 29,916 jobs in Rhode Island in 2013, adding $3.9 billion to the state’s output, which represents 7.7 percent of the state’s gross domestic product. If the industry were able to return to the “normal” operating levels observed in 2001, the sector’s direct GDP contribution would rise from $2.07 billion to $2.75 billion. That would support 9,880 new jobs in Rhode Island, creating $404 million in extra income for Rhode Island households, and generating $60.2 million more in tax revenue for the state, the report found.
John Marcantonio, executive director for the Rhode Island Builders Association, joined with four other trade groups to pay $10,000 for a report they believe helps quantify the industry’s value to the state. The other groups are ABC, the Associated General Contractors, the Construction Industries of Rhode Island and Build RI.
“We know the industry does play a role [economically], so we needed to spend some money to define what its contributions would be if it was healthy,” Marcantonio said. “Frankly, it’s the industry that’s been struggling the most. It went through a depression, not a recession.”
That uniform experience has led trade groups that often found themselves competing to unite as the Rhode Island Construction Coalition to get behind three broad goals: reforming the construction permitting process, identifying issues that delay development and increase construction costs and assessing opportunities to build and remodel public and private properties across cities and towns here.
The Gilbane Building Co. helped promote formation of the coalition, Boisselle said, so that, as one ABC member put it, the trade groups would replace “fighting over a small pie” of available work in the state with mutual support and cooperation, all with the aim of finding ways for the state to fund improvements to its public schools and road and sewer infrastructure.
A moratorium on school-building improvements is about to expire in June.
Though specific recommendations for change have not yet been formulated by the coalition, the report may help spur consensus among politicians about how to pay for and prioritize needed building and infrastructure improvements, Boisselle said. “We need to refurbish a lot of the schools, upgrade them and bring them up to code, and yet every year there seems to be this divide as to who’s going to pay what,” said Boisselle. “All the parties need to get together, because the way we do business has not helped us. We need to make it so some people will want to come to Rhode Island and not be scared away.”
John Sinnott, vice president and business-unit leader for Gilbane’s Rhode Island division, said that stiff competition and few opportunities resulted in Gilbane losing some bids to competitors for jobs, namely work on a manufacturing facility for Electric Boat and construction of the new Greencore building at the Quonset Business Park in North Kingstown.
Based in Providence, Gilbane has $4 billion in annual sales and 2,500 employees in 39 U.S. cities and 14 locations overseas, Sinnott said. But the market has been so bad that about 10 workers living in Rhode Island have had to temporarily relocate outside of the state and another 10 are commuting to jobs in Connecticut and Massachusetts, he said.
The report calls attention to the work that needs doing, particularly with regard to public-school construction and highway, bridge, road and utility improvements that are sorely needed, he said.
“If you’re building houses, you’re stimulating the economy but you also need infrastructure. Then you’re going to need schools, invest in your schools, create work,” Sinnott said. “If you have better schools, affordable housing and an educated workforce, then you’re going to attract business, keep business, keep a lot of students graduating, the entrepreneurs who are the next inventors.” •

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