The recovery of the construction trades could be a major factor in the rebuilding of the overall economy. Juli Niemann, a Marketplace analyst from Smith, Moore and Company, says, " The construction trade is really the only thing that's going to bring this out. The problem with that: it's longer-term. There's no short-term fix for the mess that we're in." She says that the economic gains we saw earlier this year were tied to manufacturing, and primarily affected export markets. Investment in the country's infrastructure could have more of an impact. Ms Niemann also says, " Thirty-five thousand jobs are created for about every billion dollars spent on transportation -- that's very effective. You've got a multiplier effect of 2 to 1." The "transportation" she is talking about is construction repairs to ports, highways and bridges. Read the transcript or listen to the radio segment at: Marketplace Morning Report Sept 6 2011 If construction jobs have the most positive impact, what is the outlook for the economy? Construction in the private sector does not look good. According to the AIA Consensus Construction Forecast , nonresidential and commercial construction will continue to decline in 2011 and will not pick up again until sometime in 2012. The bleak economic outlook has a circular effect, as investing in new construction seems riskier, which in turn depresses the economy further as it does not create the needed construction jobs. In addition to the private sector, there is public spending on infrastructure projects. The American Recovery and Reinvestment Act of 2009 [ARRA] was an economic stimulus package based on the debatable principle that " during recessions, the government should offset the decrease in private spending with an increase in public spending in order to save jobs and stop further economic deterioration." (Keynesian macroeconomic theory, quoted in the Wikipedia article on ARRA) This Act "needs a booster shot" said two Iowan legislators in an August 2011 roundtable in Cedar Rapids about re-building the middle class. They called for "more federal investment to stimulate the sluggish economy and put Iowans to work," according to an article by James Q. Lynch in The Gazette . Has this approach been shown to be effective? According to a report by the Committee for a Responsible Federal Budget at the 2-year anniversary of ARRA, the investment by the government, primarily in infrastructure projects, has had a positive impact on the jobs market and on the economy: " While controversy exists about the magnitude of and, to a lesser extent, the direction of the impact of ARRA, general consensus among economists is that it significantly helped the economy. CBO's latest estimate in November 2010 said that through the third quarter of 2010, ARRA had lowered the unemployment rate by somewhere between 0.8 percent and 2.0 percent and raised real GDP by between 1.5 percent and 4.2 percent. CBO's employment estimates from ARRA correspond to between 1.4 and 3.7 million more people (or full-time equivalents) employed as a result of ARRA. " Nevertheless, controversy will always exist when government spending is involved. Marketplace is produced by American Public Radio. Follow up : 1. When the Federal government grants money to improve and repair highways in a state, what kinds of jobs are created? Think about planning, construction, ancillary supply businesses, and service businesses that will be impacted. 2. What may be the negative impacts of this type of government spending? 3. What do the following acronyms mean? CBO, GDP, AIA