Construction lobby urges stimulus

Construction lobby urges stimulus

Because the construction industry has been one of the hardest hit by the economic slowdown, a majority of non-residential construction companies will cut spending and payroll if an economic stimulus package is not passed soon by Congress, the Associated General Contractors of America (AGC) said during a conference call today

Because the construction industry has been one of the hardest hit by the economic slowdown, a majority of non-residential construction companies will cut spending and payroll if an economic stimulus package is not passed soon by Congress, the Associated General Contractors of America (AGC) said during a conference call today.

“While the last few months of 2008 have been difficult for the general economy, they have been devastating for the construction industry,” said Stephen Sandherr, AGC CEO. “And the employment and business picture for 2009 makes 2008 seem good by comparison.

"Unless the business climate changes significantly and soon, the construction sector will continue to experience the kind of devastating job losses and crippling declines in business activity that will undermine efforts to end the recession," Sandherr added.

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According to an AGC survey, two-thirds of non-residential construction companies plan to cut their payrolls in 2009, resulting in a 30% decline in the number of people working on construction projects. AGC said that 92% of building contractors, 93% of road builders, 77% of water resource contractors and 83% of utility contractors expect or are currently experiencing declining activity.

However, if a massive stimulus package for infrastructure is passed, 85% of non-residential construction companies would either cancel layoffs or add new employees, as well as invest an average of $500,000 this year in new equipment if they received new work, AGC said.

"With a stimulus, construction companies can get more people to work and more money into the economy in a way that will immediately boost our economy," Sandherr said. "Without a stimulus, construction companies will cut jobs, slash spending and continue to be among the hardest-hit sectors within our economy."

According to AGC chief economist Ken Simonson, the difficulties are being felt across the country, with nearly every state running a deficit this fiscal year, leading them to hold off or cancel construction projects. “Every state has shovel-ready projects ready to go,” he said.

Sandherr noted that AGC is urging Congress for $2.2 billion to help renovate and repair federal facilities and crumbling schools, as well as working with building, design and labor groups to call for new tax incentives that would encourage the construction of energy-efficient buildings, renewable energy facilities, and other commercial projects.

"We are doing everything imaginable to ensure that our construction employment and business forecast does not become a reality," Sandherr added.

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