An estimated two-thirds of the nation’s non-residential
construction companies are planning to cut their payrolls, according to new
employment and business forecast figures released by the
Associated General
Contractors of America. The layoffs are forecast to result in a 30 percent
decline in the number of people working on construction projects.
The AGC believes that unless
business climates change significantly ― and soon ― the construction sector
will continue to experience “devastating job losses and crippling declines in
business activity that will undermine efforts to end the recession, according
to AGC CEO
Stephen Sandherr.
The forecast results are based on a
representative survey conducted by the construction association late in 2008.
The survey found “no relief in sight” for construction companies that already
have been among the hardest hit by the economic
slowdown.
Many construction companies experienced
significant slowdowns beginning late last year, resulting in a 10 percent
decline in the number of construction workers since 2006, Sandherr noted.
According to the forecast figures,
the association’s member companies have seen or are planning for declining
activity in every type of construction market:
- 92% of
building contractors and 93% of road builders are expecting or experiencing
declining activity.
- More than 83% of utility
contractors are bracing for declines, while 77% of water resource contractors are
expecting a decline in business building levees or locks.
The AGC forecast did find, however, that planned investments
in infrastructure projects as part of the stimulus package is likely to
dramatically improve the employment and business outlook for the year. For
example, 85 percent of non-residential construction companies would either
cancel layoffs or add new employees if states embarked on stimulus-funded
infrastructure projects.
According to the forecast,
construction companies would increase their payrolls by 25 percent if the
stimulus included new infrastructure investments. And construction
companies predict they would invest an average of $500,000 this year in new
equipment if they received new work as part of the stimulus package.
“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.”
The CEO noted that the association
was working to find ways to improve the business environment for the
construction community. He said builders across the country were urging
Congress to include infrastructure investments in the stimulus, and that the
association was calling for $2.2 billion to help renovate hundreds of federal
facilities and for additional funds to repair crumbling schools.
He also noted that the association was
working with a range of building, design and labor groups to call for new tax
incentives to encourage conversion to energy efficient buildings, construction
of renewable energy facilities, remediation of brown fields and construction of
new airport and commercial projects.
In the forecast announcement, Sandherr said
the groups were proposing the creation of “economic crisis zones” that would,
similar to natural disaster zones, provide tax exemptions and private activity
bonding authority to finance construction projects in communities experiencing
two consecutive months of double-digit unemployment.
“We are doing everything imaginable to
ensure that our construction employment and business forecast does not become a
reality,” Sandherr said.
For survey results,
click
here.
Source:
AGC
