|
Southwestern Illinois and St. Louis-area commercial projects of $100 million and up.
Terry Nelson, executive secretary-treasurer of the Carpenters' District Council, said the magnitude of dollars being
invested in St. Louis today by the private sector is notable.
"Pinnacle (Casino) downtown, a half-billion-dollar project, is 40 percent done and already we're starting with Pinnacle's
next $400 million job down the street," said Nelson, referring to Pinnacle Entertainment Corp.'s South St. Louis
entertainment district that is planned to revitalize the Lemay neighborhood and create 7,000 jobs. "Pinnacle's developments
and the Casino Queen renovations alone total more than a billion dollars of construction work here this year. We train every
day to continue to meet the need that's out there. Our apprentice programs are open seven days a week, 24 hours a day. We've
got to be. There's that much going on," he said.
St. Louis-headquartered cement, concrete and aggregate supplier Holcim Ltd. is investing $1.1 billion in the greater St.
Louis region with the construction of its new plant 55 miles south of the city along the Mississippi River. Nelson said at
the peak of construction, the project will employ about 1,200 workers. "The Chrysler plant in Fenton is going to be of the
same magnitude as the Holcim plant…another enormous construction project for St. Louis," he said, "and another
billion-dollar investment in the region."
Nelson's Carpenters are also involved in the $1 billion retooling of Chrysler's south plant in Fenton.
Illinois-based projects on the list, in addition to Casino Queen's "Boat in a Moat" $150 million expansion effort,
include two proposed ethanol plants, each totaling approximately $150 million. The largest Illinois-based construction
projects to begin in 2007 are ConocoPhillips' refinery expansion and Peabody Energy's Prairie State Energy Campus coal plant
and mine construction; each is a billion-dollar-plus project (see related story on page 8).
Bryan Bezold, chief economist with the St. Louis Regional Chamber and Growth Association, sees the $13 billion-plus of
commercial construction on the Missouri and Illinois sides of the Mighty Mississippi as offsetting whatever slump the region
has sustained in the residential construction market.
"In 2006, construction employment here grew by 2 percent whereas the overall economy added jobs at a rate of 1 percent,"
said Bezold, "so construction jobs in the St. Louis region were being added at twice the rate as those in the rest of the
economy. And that's also been happening at the same time that we're seeing contraction in the housing and residential
markets."
Bezold said his estimate of an $11 million indirect economic impact, based on the $13.1 billion construction figure,
indicates spending to buy construction supplies and raw materials for these massive projects, paycheck spending on the part
of the thousands of trades workers involved in the work itself, and "wider spending" including that of consultants and other
service-related professionals connected with the jobs.
|
The diversity of projects on this "Top 17" list, in terms of industry sectors, is also a very good thing for St. Louis
and Southwestern Illinois, according to Bezold, and it's a reflection of the national construction outlook as well.
"We have a pretty diverse economy in the St. Louis metropolitan area, so it's fitting that the list of major construction
projections and capital investment is also diverse," he said. "Manufacturing, energy, health care, entertainment and
transportation are all represented on this list. It's pretty much a microcosm of the U.S."
Focusing on manufacturing construction, Bezold said it's important to take a look at mega-projects such as the Holcim
cement plant and also the Chrysler plant and to appreciate it even beyond the plusses of putting thousands to work while the
construction is taking place.
"The key thing about manufacturing is the capital investment and the reason behind it," Bezold said. "Capital investment
makes labor more productive. Companies are willing to invest in and build new capital because they know it will lead to
increased productivity. The output of a plant is a function of how good the equipment is and how well-trained the workers
are. And when labor is more productive, those laborers will earn higher wages, and they'll earn more and spend more and
invest more back into the region. Some of the manufacturers who have been here in the St. Louis region for a long time are
willing to really invest a serious amount of capital in this region. It's great to see and be a part of."
Once per calendar quarter, the St. Louis RCGA conducts a Business Climate Survey of its membership to gain perspective on
the economic pulse of employers across the region. Results from the Winter 2007 survey, in which 196 area organizations
responded, the question was asked: "Are the costs of providing healthcare benefits affecting your hiring plans?"
Of all respondents, 62 percent said they planned on hiring more workers within the next 12 months. Of those who responded
who hire workers in the construction sector, 80 percent said they planned on hiring more workers in the coming year.
In the same RCGA survey, participants were queried as to how their company's revenues would fare in the coming 12 months.
Bezold said of all respondents, 55 percent said revenues would increase slightly and 29 percent predicted revenues would
increase rapidly. But of the St. Louis construction industry employers answering this question, 70 percent predicted
revenues at their company would increase over the next 12 months and 20 percent said their firm's revenues would increase
rapidly in the coming year.
"Based on this survey, St. Louis' construction industry feels confident about the future," said Bezold. "There seems to
be a lot of construction work in the pipeline, and that bodes well for the region's economy."
|
